Roy Langbord v. US Dept of the Treasury , 832 F.3d 170 ( 2016 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
___________
No. 12-4574
___________
ROY LANGBORD; DAVID LANGBORD;
JOAN LANGBORD
v.
UNITED STATES DEPARTMENT OF THE TREASURY;
UNITED STATES BUREAU OF THE MINT; SECRETARY
OF THE UNITED STATES DEPARTMENT OF THE
TREASURY; ACTING GENERAL COUNSEL OF THE
UNITED STATES DEPARTMENT OF THE TREASURY;
DIRECTOR OF THE UNITED STATES MINT; CHIEF
COUNSEL UNITED STATES MINT; DEPUTY
DIRECTOR OF THE UNITED STATES MINT; JOHN DOE
NOS. 1 TO 10 "JOHN DOE" BEING FICTIONAL FIRST
AND LAST NAMES; UNITED STATES OF AMERICA
UNITED STATES OF AMERICA,
Third Party Plaintiff
v.
TEN 1933 DOUBLE EAGLE GOLD PIECES; ROY
LANGBORD; DAVID LANGBORD; JOAN LANGBORD,
Third Party Defendants
Roy Langbord, David Langbord, Joan Langbord,
Appellants
__________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(E.D. Pa. No. 2-06-cv-05315)
District Judge: Honorable Legrome D. Davis
___________
Argued on November 19, 2014 before Merits Panel
Court Ordered Rehearing En Banc on July 28, 2015
Argued En Banc on October 14, 2015
Before: McKEE, Chief Judge, AMBRO, FUENTES,
SMITH, FISHER, CHAGARES, JORDAN, HARDIMAN,
VANASKIE, SHWARTZ, KRAUSE, and RENDELL,*
Circuit Judges.**
(Filed: August 1, 2016)
*
The Honorable Marjorie O. Rendell assumed Senior
Status on July 1, 2015.
**
The Honorable Dolores K. Sloviter assumed inactive
status on April 4, 2016, after the argument and conference in
this case, but before filing of the opinion.
2
Barry H. Berke [Argued]
Eric A. Tirschwell
Kramer Levin Naftalis & Frankel
1177 Avenue of the Americas
New York, NY 10032
Attorneys for Appellants
Zane David Memeger
Robert A. Zauzmer [Argued]
Jacqueline C. Romero
Nancy Rue
Office of United States Attorney
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
Attorneys for Defendants-Appellees
____________
OPINION
____________
HARDIMAN, Circuit Judge, with whom AMBRO,
FUENTES, SMITH, FISHER, CHAGARES, VANASKIE,
and SHWARTZ, Circuit Judges, join.
This appeal presents a high-stakes dispute over ten
pieces of gold. Joan Langbord and her sons, Roy and David
Langbord, claim to be the rightful owners of the gold pieces
while the Government claims they are property of the United
States. Following a jury trial, the United States District Court
for the Eastern District of Pennsylvania ruled in favor of the
Government. The Langbords initially prevailed on appeal to
this Court, but we vacated the panel opinion and agreed to
3
hear the case en banc. For the reasons that follow, we will
affirm the District Court’s judgment.
I
The ten gold pieces at issue—1933 Double Eagles
with a face value of $20—were designed at the request of
President Theodore Roosevelt by Augustus Saint-Gaudens
shortly before the renowned sculptor’s death in 1907. During
the next twenty-five years, the United States Mint
manufactured and circulated tens of millions of Double
Eagles as legal tender. Things changed significantly for the
Double Eagle during the Great Depression, however. Within
days of his inauguration on March 4, 1933, President Franklin
Delano Roosevelt signed a series of orders effectively
prohibiting the Nation’s banks from paying out gold. See
Proclamation No. 2039, 48 Stat. 1689–91 (Mar. 6, 1933);
Exec. Order No. 6073 (Mar. 10, 1933). Less than three
months later, the United States went off the gold standard.
See Exec. Order No. 6102 (Apr. 5, 1933); H.R.J. Res. 192,
73d Cong., 48 Stat. 112–13 (June 5, 1933). That same year,
the United States Mint in Philadelphia struck 445,500 Double
Eagles, but they were never issued. Instead, all but 500 of the
1933 Double Eagles were placed into the Mint’s vault in June
1933. The remaining coins1 were held by the Mint’s Cashier;
1
The parties dispute whether the 1933 Double Eagles
are “coins.” The Langbords claim they are coins because they
bear official indicia of their use as instruments of stored
value; the Government disagrees because they were never
circulated. See generally 31 U.S.C. § 5312(a)(3) (defining
“monetary instrument” as including “United States coins and
currency”); Black’s Law Dictionary 326 (4th ed. 1951)
(defining a coin as “[p]ieces of gold, silver, or other metal,
4
of those, twenty-nine were destroyed in chemical reactions
used to verify their metallic purity and two were sent to the
Smithsonian Institution in October 1934.
By 1937, all of the 1933 Double Eagles held at the
Philadelphia Mint were supposed to have been melted. This
turned out not to be the case, however, as some coins were
transferred among collectors, which prompted the Secret
Service to begin investigating the matter in March 1944. The
following year, the Secret Service recovered a small number
of 1933 Double Eagles and determined that they had been
stolen from the Mint by George McCann, who was the Mint’s
Cashier from 1934 to 1940. The Secret Service also
concluded that the coins had been distributed by a
Philadelphia merchant, Israel Switt, who was Joan
Langbord’s father (and grandfather to Roy and David
Langbord).
Since 1944, the United States has attempted to locate
and recover all extant 1933 Double Eagles. See United States
v. Barnard, 72 F. Supp. 531, 532–33 (W.D. Tenn. 1947)
(seeking replevin of a 1933 Double Eagle held by a private
collector). The only exception has been a 1933 Double Eagle
sold to King Farouk of Egypt in 1944 and later acquired in
1995 by Stephen Fenton, an English coin dealer. When
Fenton attempted to resell that coin to a collector in New
York, the Government seized it and a protracted legal dispute
fashioned into a prescribed shape, weight, and degree of
fineness, and stamped, by authority of government, with
certain marks and devices, and put into circulation as money
at a fixed value”). Without resolving this immaterial dispute,
we refer to the 1933 Double Eagles as coins for ease of
reference.
5
ensued. According to the Government, it agreed to resolve its
dispute with Fenton because the Treasury Department had
improvidently issued an export license for the coin when it
was sold to King Farouk in 1944. The “Fenton-Farouk Coin”
was sold at auction in 2002 to an anonymous buyer for
$7,590,020 and the net proceeds were divided equally
between Fenton and the Government pursuant to their
settlement agreement.
Just over a year after the Fenton-Farouk Coin was sold
at auction, Joan Langbord allegedly discovered ten 1933
Double Eagles in a family safe-deposit box. Her attorney,
Barry Berke, who had represented Fenton in his dispute with
the Government, contacted the Mint in an effort to resolve the
Langbords’ claim in the same way. After meeting with Mint
officials, the Langbords agreed to turn the coins over for
authentication but reserved “all rights and remedies.” App.
806. The Mint took possession of the ten 1933 Double Eagles
from Roy Langbord on September 22, 2004.
The Mint authenticated the coins in May 2005, but
refused to return them to the Langbords. In July 2005,
attorney Berke asked the Mint to reverse course in light of its
treatment of other coins of questionable provenance and
argued that “there [was] no basis for the government to seek
forfeiture of the . . . 1933 Double Eagles.” App. 911–13. A
month later, the Mint rejected Berke’s overture, writing:
The United States Mint has no intention of
seeking forfeiture of these ten Double Eagles
because they are, and always have been,
property belonging to the United States; this
makes forfeiture proceedings entirely
unnecessary. These Double Eagles never were
6
lawfully issued but, instead, were taken out of
the United States Mint at Philadelphia in an
unlawful manner. Indeed, the Langbord family
was legally obligated to return this property to
the United States . . . and will not be able to
establish based on any reliable or admissible
evidence how they currently possess, or ever
possessed, title to this United States
Government property.
App. 823.
Although the Mint had disclaimed any intention of
forfeiting the coins, the Langbords responded in September
2005 by sending a “seized asset claim” to the Mint, invoking
18 U.S.C. § 983, a statute enacted by the Civil Asset
Forfeiture Reform Act of 2000 (CAFRA), Pub. L. No. 106-
185, 114 Stat. 202, that contains procedural protections for
those whose property is subject to forfeiture. The Mint
returned the claim to the Langbords “without action.” App.
837. In doing so, the Government argued that no seizure had
occurred because “all 1933 Double Eagles are, and always
have been, property belonging to the United States” and that
the family had “voluntarily surrendered” the coins to the
Mint. App. 837–38. In a series of missives exchanged in
December 2005, the Langbords criticized the Mint for
attempting to “rewrite history and create some kind of record
a few days before the deadline for the government to either
return the coins or institute a forfeiture action.” App. 841. The
Mint responded curtly that the parties had a “fundamental[]
disagree[ment].” App. 848.
7
II
Unable to obtain relief through negotiation or
administrative procedures,2 the Langbords turned to the
courts. In December 2006, they brought suit in the United
States District Court for the Eastern District of Pennsylvania
against the Mint, the Department of the Treasury, and various
federal officials. The Langbords alleged violations of the
United States Constitution, CAFRA, and the Administrative
Procedure Act, as well as common law torts. They also
sought a declaratory judgment to require the Government to
comply with CAFRA either by returning the coins or by
commencing a forfeiture proceeding. The Government filed
motions to dismiss, but they were denied. The Government
then filed an answer without asserting any counterclaims.
A
Following discovery, the parties filed cross-motions
for partial summary judgment and the District Court rendered
a split decision. See Langbord v. U.S. Dep’t of the Treasury,
645 F. Supp. 2d 381, 401–02 (E.D. Pa. 2009).
The Langbords prevailed on both of their
constitutional claims. The District Court first held that the
Mint committed an unconstitutional seizure when it refused to
return the coins to the Langbords. Citing Mason v. Pulliam,
557 F.2d 426, 429 (5th Cir. 1977), the Court reasoned that the
Langbords’ Fourth Amendment possessory rights to the ten
2
After the Mint rejected their seized asset claim, the
Langbords filed an administrative “damages claim” in May
2006. App. 851–56; see also 28 U.S.C. § 2675; 28 C.F.R.
§ 14.2. The Mint denied that claim as well.
8
Double Eagles were not vitiated by the Government’s claim
of ownership. Langbord, 645 F. Supp. 2d at 390–92. The
seizure was unreasonable, the Court held, because the
Government failed to obtain a warrant and its “superior
property interest” did not “control the right of the
Government to search and seize.” Id. at 393–94 (quoting
Warden, Md. Penitentiary v. Hayden, 387 U.S. 294, 304
(1967)). The District Court also found that the Langbords’
Fifth Amendment due process rights were violated. After
rejecting the Government’s contention that the Mint had not
seized “property” within the meaning of the Due Process
Clause, the Court evaluated the factors established in
Mathews v. Eldridge, 424 U.S. 319, 335 (1976) and
concluded that the Langbords were entitled to a
predeprivation hearing before a neutral arbiter. Langbord, 645
F. Supp. 2d at 394–99.
Unlike its adjudication of their constitutional claims,
the District Court rejected the Langbords’ argument that the
Government violated CAFRA by failing to comply with the
statute’s notice and claim procedures. In doing so, the Court
held that CAFRA did not apply because the Mint’s
repossession of the coins was not tantamount to a nonjudicial
(i.e., administrative) forfeiture. Id. at 388–90. Despite
CAFRA’s inapplicability, the District Court nevertheless
ordered the Government to “initiate a judicial forfeiture
proceeding concerning the 1933 Double Eagles” as a remedy
for the Mint’s Fourth and Fifth Amendment violations, id. at
402, reasoning:
Where a court concludes, as we have here, that
the Government seized property without due
process and intends to retain the property, we
must “order the government to either return the
9
[property] to the plaintiffs or to commence
judicial forfeiture . . . at which time the
plaintiffs may raise whatever defenses are
available to them.”
Id. at 399 (quoting Garcia v. Meza, 235 F.3d 287, 292 (7th
Cir. 2000)) (citing United States v. Von Neumann, 474 U.S.
242, 251 (1986); Acadia Tech., Inc. v. United States, 458 F.3d
1327, 1334 (Fed. Cir. 2006); United States v. Giraldo, 45
F.3d 509, 512 (1st Cir. 1995)). Consequently, the District
Court required the Government to file a judicial forfeiture
action in accordance with the dictates of CAFRA. Id.B
Before complying with the District Court’s order to
initiate a judicial forfeiture proceeding, the Government
sought leave to allege three additional counts: replevin,
declaratory judgment, and claims against John Does “to
resolve ripening disputes concerning ownership of other 1933
Double Eagles,” which “several individuals [are] rumored to
have, or to have had.” App. 1145–58. The District Court
denied the Government’s request to seek replevin, noting that
“a property holder cannot bring a replevin claim seeking the
return of property it already has.” Langbord v. U.S. Dep’t of
the Treasury, 749 F. Supp. 2d 268, 274 (E.D. Pa. 2010).
Likewise, the Court denied the Government’s motion with
respect to the John Doe claims because the events
surrounding them were not “reasonably related” to the
original claim as required by Rule 20 of the Federal Rules of
Civil Procedure. Id. at 277–78.
The District Court did, however, permit the
Government to seek a declaratory judgment that the coins
10
“were not authorized to be taken from the United States Mint
and that therefore, as a matter of law, all of the 1933 Double
Eagles remain property belonging to the United States.” App.
1150; see also Langbord, 749 F. Supp. 2d at 271–72, 274–75
(treating the claim as a counterclaim). In doing so, the Court
rejected the Langbords’ contention that the Government’s
nearly four-year delay in seeking a declaratory judgment was
“prejudicial,” “undue,” or in “bad faith.” Langbord, 749 F.
Supp. 2d at 272–76 (citing Foman v. Davis, 371 U.S. 178,
182 (1962); Cureton v. NCAA, 252 F.3d 267, 273 (3d Cir.
2001)). Instead, the District Court found the Government’s
delay was caused by a “misguided legal strategy,” and that
the Langbords were not prejudiced because they had
previously “brought title issues into the mix” by asserting
claims for replevin and conversion. Id. at 273, 275–76.
C
At this stage of the litigation, the positions of the
parties were as follows. Consistent with the District Court’s
remedial order, the Government sought forfeiture of the ten
1933 Double Eagles and a declaration that it owned the coins.
Meanwhile, the Langbords attempted to fend off the
Government by arguing, inter alia, that “[f]orfeiture of the
1933 Double Eagles [was] barred by 18 U.S.C. §
983(a)(3)(B) because the government failed to file a
complaint for forfeiture in the time allotted by [CAFRA].”
App. 1296.
For two weeks in July 2011 the dispute was tried to a
jury, which issued a verdict for the Government on its
forfeiture claim. The Langbords sought judgment as a matter
of law both at the close of the evidence and following the
verdict. On August 29, 2012, the District Court denied the
11
Langbords’ post-trial motion and entered judgment for the
Government on its forfeiture claim. Langbord v. U.S. Dep’t of
the Treasury, 888 F. Supp. 2d 606, 637 (E.D. Pa. 2012). The
Court also declared:
The disputed Double Eagles were not lawfully
removed from the United States Mint and
accordingly, as a matter of law, they remain the
property of the United States, regardless of (1)
the applicability of CAFRA to the disputed
Double Eagles, (2) Claimants’ state of mind
with respect to the coins; or (3) how the coins
came into Claimants’ possession.
Id. at 633–34. The Langbords filed a timely appeal to this
Court; the Government did not file a cross-appeal.
D
On appeal, the Langbords challenged several orders of
the District Court, as well as the jury verdict. A panel of this
Court vacated “all orders at issue on appeal that postdate[d]
the [District Court’s] July 29, 2009 order, including the jury
verdict and the . . . order entering judgment.” Langbord v.
U.S. Dep’t of the Treasury, 783 F.3d 441, 445 (3d Cir. 2015).
In addition, the panel remanded the case to the District Court
with instructions to “return the [1933] Double Eagles to the
Langbords.” Id. at 458. Judge Sloviter dissented, opining that
the coins should not be turned over to the Langbords because
they belong to the Government. Id.
The United States filed a timely petition for rehearing
en banc. In an order dated July 28, 2015, we granted the
petition and vacated the panel opinion and judgment. Oral
12
arguments were heard on October 14, 2015, and the matter is
ripe for disposition.
III
The District Court had jurisdiction over the
Langbords’ claims under 28 U.S.C. §§ 1331, 1346, and 1361,
and 5 U.S.C. § 702. It had jurisdiction over the Government’s
claims under 28 U.S.C. §§ 1345 and 1355. We have appellate
jurisdiction under 28 U.S.C. § 1291.
IV
The Langbords’ appellate arguments can be
summarized as follows: (1) the Government’s forfeiture
action was time-barred; (2) the District Court should not have
decided the Government’s declaratory judgment claim; (3)
the District Court committed reversible errors with respect to
the evidence; and (4) the jury instructions were erroneous.
We address each argument in turn.3
A
We turn first to the Langbords’ argument that the
Government’s forfeiture action was time-barred. Under 18
3
At various stages of this litigation, the Government
has contended that it should not have been required to initiate
forfeiture proceedings because the ten 1933 Double Eagles
are, were, and always will be, property of the United States.
This argument has some logical appeal, but regardless of its
merits, the propriety of the District Court’s order compelling
judicial forfeiture is not before us because the Government
did not appeal it.
13
U.S.C. § 983(a)(2)(A), “[a]ny person claiming property
seized in a nonjudicial forfeiture proceeding under a civil
forfeiture statute may file a claim with the appropriate official
after the seizure.” Assuming that the claim is timely and
formally adequate, see 18 U.S.C. §§ 983(a)(2)(B) and (C), the
statute provides:
(A) Not later than 90 days after a claim has
been filed, the Government shall file a
complaint for forfeiture . . . or return the
property pending the filing of a complaint,
except that a court in the district in which the
complaint will be filed may extend the period
for filing a complaint for good cause shown or
upon agreement of the parties.
(B) If the Government does not . . . file a
complaint for forfeiture or return the property,
in accordance with subparagraph (A) . . . the
Government shall promptly release the property
pursuant to regulations promulgated by the
Attorney General, and may not take any further
action to effect the civil forfeiture of such
property in connection with the underlying
offense.
18 U.S.C. § 983(a)(3).
Consistent with this statutory scheme, the Langbords’
argument is a straightforward syllogism: (1) they filed a
seized asset claim which started § 983(a)(3)’s ninety-day
period for the Government to file a forfeiture complaint; (2)
the Government failed to file a forfeiture action or to obtain
14
an extension of time within ninety days; therefore, (3) the
Government must return the coins to the Langbords.
While the logic of this syllogism is valid, it is based on
a false premise, namely, that the Langbords’ seized asset
claim triggered CAFRA’s ninety-day deadline. Although
subsection (a)(2)(A) of § 983 allows a seized asset claim to be
filed “after the seizure,” it also requires that the claim be
directed to “property seized in a nonjudicial civil forfeiture
proceeding.” Id. (emphasis added). This language
presupposes that a nonjudicial forfeiture4 is pending before a
4
Nonjudicial (or administrative) forfeiture is one of
three modes of forfeiture established by federal law, the other
two being judicial forfeitures brought as civil in rem
proceedings and criminal forfeitures. See generally Stefan D.
Cassella, Asset Forfeiture Law in the United States 256 (2d
ed. 2013) [hereinafter Cassella, Asset Forfeiture]. Nonjudicial
forfeitures “entail[] no judicial involvement,” United States v.
McGlory, 202 F.3d 664, 669–70 (3d Cir. 2000), and “permit[]
the United States to determine whether property in its custody
is unclaimed, and, if it is, to take ownership without the
trouble and expense of court proceedings,” Small v. United
States, 136 F.3d 1334, 1335 (D.C. Cir. 1998). CAFRA
“superimposed” additional rules governing nonjudicial
forfeitures, see Cassella, Asset Forfeiture 158, but the
essential scheme has not changed since 1844—after providing
sufficient notice, an authorized agency may, in the absence of
a claimant willing to contest the action, issue a “declaration of
forfeiture . . . [with] the same force and effect as a final
decree . . . in a judicial forfeiture proceeding in a district court
of the United States.” 19 U.S.C. § 1609(b); compare United
States v. U.S. Currency in the Amount of $2,857.00, 754 F.2d
15proper seized asset claim can be filed. See also In re Funds on
Deposit, 919 F. Supp. 2d 169, 172–77 (D. Mass. 2012);
Chaim v. United States, 692 F. Supp. 2d 461, 465–66 (D.N.J.
2010); United States v. 1866.75 Board Feet of Dipteryx
Panamensis, 587 F. Supp. 2d 740, 751 (E.D. Va. 2008). A
contrary interpretation would render the emphasized statutory
text “mere surplusage, a result we try to avoid,” Direct Mktg.
Ass’n v. Brohl, 135 S. Ct. 1124, 1132 (2015); see also, e.g.,
Disabled in Action of Pa. v. Se. Pa. Transp. Auth., 539 F.3d
199, 210 (3d Cir. 2015) (“We assume . . . that every word in a
statute has meaning and avoid interpreting one part of a
statute in a manner that renders another part superfluous.”).
Given that property must be seized in a nonjudicial forfeiture
proceeding before a seized asset claim triggers the
Government’s ninety-day period to respond, for the
Langbords’ argument to succeed, they would have to show
that the Mint’s retention of the coins initiated a nonjudicial
forfeiture. As we shall explain, that was not the case.
Here, the Government determined that it was not
obliged to initiate forfeiture proceedings against the 1933
Double Eagles because it had merely repossessed its own
property. Consistent with this view, neither the Mint nor any
other federal agency took any steps to initiate a nonjudicial
forfeiture. In fact, the Government explicitly disclaimed any
intent to forfeit the coins: “The United States Mint has no
intention of seeking forfeiture of these ten Double Eagles
because they are, and always have been, property belonging
208, 211–12 (7th Cir. 1985) (summarizing nonjudicial
forfeiture pre-CAFRA), with Malladi Drugs & Pharms., Ltd.
v. Tandy, 552 F.3d 885, 887–88 (D.C. Cir. 2009) (same but
post CAFRA’s enactment).
16
to the United States; this makes forfeiture proceedings
entirely unnecessary.” App. 823.5 Instead, the Government
asserted its ownership rights to the coins.
In reaction to the Government’s assertion of
ownership, the Langbords incongruously responded with a
seized asset claim in an attempt to invoke protections
afforded those whose property is being forfeited—a different
subject matter. See United States v. A Parcel of Land Known
as 92 Buena Vista Ave., 507 U.S. 111, 125–26 (1993)
(plurality opinion) (citing United States v. Grundy, 7 U.S. (3
Cranch) 337, 350–51 (1806) (“Until the Government does
5
The Langbords claim that the Mint’s letter
constituted notice that initiated a nonjudicial forfeiture. We
disagree because, although CAFRA does not specify the
content of nonjudicial forfeiture notices, a letter that explicitly
disavows any intent to initiate a forfeiture surely cannot
suffice.
Nor do we agree with the Langbords that the
Government “intended to achieve a nonjudicial forfeiture”
because federal agencies besides the Mint thought pursuing
forfeiture would be a prudent course of action, or because
“subsequent communications to the Langbords made clear the
government was retaining the Coins with the intent of
permanently divesting the Langbords of their property
without providing compensation or going to court.” Langbord
Br. 28–29. With respect to the former, it is true that most of
the agencies involved recommended forfeiture, but it was the
Mint’s view that ultimately prevailed. And with respect to the
latter, that argument is based on the erroneous premise that
the Government’s seizure of the 1933 Double Eagles sufficed
to commence a nonjudicial forfeiture proceeding.
17
win . . . a judgment [of forfeiture], however, someone else
owns the property.”)); id. at 134 (Scalia, J., concurring)
(“What the United States already owns cannot be forfeited to
it.”). While forfeiture is a process by which “[t]itle is
instantaneously transferred to another,” Black’s Law
Dictionary 722 (9th ed. 2009), an assertion of ownership
presupposes that the party already has title. Thus, the
Langbords’ seized asset claim was akin to filing a petition for
writ of habeas corpus on behalf of someone not in custody—
mismatched and ineffective.
The Langbords counter that regardless of the agency’s
intentions and conduct, the Government nonetheless initiated
a nonjudicial civil forfeiture proceeding when it seized the
1933 Double Eagles. We disagree for two reasons.
First, seizures and forfeitures are not the same. A
“seizure” is “[t]he act or an instance of taking possession of . .
. property by legal right or process.” Black’s Law Dictionary
1480 (9th ed. 2009). “Forfeiture,” as previously noted,
involves a transfer of title from one party to another. Id. at
722. As these definitions indicate, the essential difference
between a “seizure” and a “forfeiture” is that in the former,
the government obtains possession while in the latter it
obtains title (i.e., ownership). Government actors regularly
seize property with the intention of returning it to the person
from whom it was seized. See, e.g., United States v.
Chambers, 192 F.3d 374, 375–76 (3d Cir. 1999) (“It is well
settled that the government is permitted to seize evidence for
use in investigation and trial, but that such property must be
returned once criminal proceedings have concluded, unless it
18
is contraband or subject to forfeiture.”).6 It follows that a
seizure alone does not initiate a forfeiture proceeding because
it does not implicate a transfer of legal title. See 92 Buena
Vista, 507 U.S. at 125 (“It has been proved that in all
forfeitures accruing at common law, nothing vests in the
government until some legal step shall be taken for the
assertion of its right . . . .” (emphasis added) (quoting Grundy,
7 U.S. (3 Cranch) at 350–51)); cf. Horne v. Dep’t of Agric.,
135 S. Ct. 2419, 2428 (2015) (regulation vesting title to
“reserve raisins” in the government constituted a “physical”
taking under the Fifth Amendment even though “[r]eserve
raisins are sometimes left on the premises of [private]
handlers,” who hold them “for the account of the
[g]overnment” (internal quotation marks omitted)).
6
To be sure, seizure of a putative res “has long been
considered a prerequisite to the initiation of in rem forfeiture
proceedings.” United States v. James Daniel Good Real
Prop., 510 U.S. 43, 57 (1993) (citing Republic Nat’l Bank of
Miami v. United States, 506 U.S. 80, 84 (1992); The Brig
Ann, 13 U.S. (9 Cranch) 289, 291 (1815)). But that fact
implicitly recognizes the distinction between seizure and
forfeiture, and the Supreme Court’s opinion in James Daniel
Good—permitting the Government to pursue forfeiture of real
property in the absence of seizure—only reinforces the point.
See also 18 U.S.C. § 985(b)(1)(A) (stating the general rule
that “real property that is the subject of a civil forfeiture
action shall not be seized before entry of an order of
forfeiture”).
19
Second, we have impliedly rejected the Langbords’
argument twice before. See Mantilla v. United States, 302
F.3d 182 (3d Cir. 2002); United States v. $8,221,877.16 in
U.S. Currency, 330 F.3d 141 (3d Cir. 2003). In Mantilla, we
considered a putatively time-barred forfeiture of money
seized by the Customs Service during an undercover drug
sting. See 302 F.3d at 184 (case proceeding under 19 U.S.C.
§ 1621). We observed that Customs failed to institute a
nonjudicial forfeiture within the five-year statute of
limitations and simply “deposited the funds into its
undercover operation account.” Id. Almost eight years after
the seizure, the claimant filed an action to recover the seized
funds raising an issue under 28 U.S.C. § 2401. Under this
statute, the claimant had a six-year statute of limitations
running from when the “right of action first accrues” to file
his suit against the government to claim his property. Id. at
184. In deciding whether the claimant’s action was timely, we
held that the six-year period under § 2401 started “at the close
of forfeiture proceedings,” or “if no forfeiture proceedings
were conducted, at the end of the five-year limitations period
during which the government is permitted to bring a forfeiture
action.” Id. at 186 (quoting Polanco v. DEA, 158 F.3d 647,
654 (2d Cir. 1998)). This holding effectively applied an
eleven-year limitations period starting from the date of
seizure to hold the claimant’s cause of action timely. See id.Had the government’s seizure of the drug money commenced
a “de facto” forfeiture, a six-year period would have applied.
One year after Mantilla we applied the same principle
against the government. In $8,221,877.16 in U.S. Currency,
we rejected the government’s argument that it commenced a
forfeiture proceeding within the applicable statute of
limitations simply by seizing funds it believed to be the
20
proceeds of drug trafficking. 330 F.3d at 157–61. In that case,
the government sought forfeiture of the defendant funds
under 18 U.S.C. § 984, which permits the United States to
pursue the forfeiture of “fungible property” (such as money)
without tracing the property to particular unlawful
transactions. 330 F.3d at 158–59. This type of forfeiture
comes with a caveat: a “forfeiture action in rem” under § 984
must be “commenced” within one year of the offense “that is
the basis for the forfeiture.” Id. at 158 (quoting 18 U.S.C. §
984 (2000)). The government argued that its seizure of the
funds was sufficient to toll the statute of limitations, but we
disagreed, holding the “commencement” of a forfeiture action
under § 984 requires the filing of a judicial forfeiture
complaint. Id. at 159–60.
We acknowledge that Mantilla and $8,211,877 were
not decided under CAFRA and do not squarely answer the
question of when a “nonjudicial civil forfeiture proceeding”
begins under the statute.7 Nevertheless, these decisions
plainly recognized—contrary to the Langbords’ contention
here—that a seizure is neither the same as a forfeiture nor
does it automatically trigger forfeiture proceedings. See also
Dusenbery v. United States, 534 U.S. 161, 163 (2002)
(observing that the FBI started the nonjudicial forfeiture
process more than two years after the property was seized);
Taylor v. United States, 483 F.3d 385, 386–87, 389 (5th Cir.
2007) (citing Barrera-Montenegro v. United States, 74 F.2d
657, 658 (5th Cir. 1996) (stating that the DEA began
7
CAFRA applies only to forfeitures commenced on or
after August 23, 2000. United States v. One “Piper” Aztec,
321 F.3d 355, 358 (3d Cir. 2003).
21
nonjudicial forfeiture proceedings a month after the property
was seized and chronicling the agency’s various forms of
notice it provided that such a proceeding had been initiated));
United States v. Miscellaneous Firearms, 376 F.3d 709, 711–
12 (7th Cir. 2004) (stating that the ATF commenced a
nonjudicial forfeiture by sending a letter to the defendant
notifying him of his rights forty-four days after the property
was seized); United States v. Dusenbery, 201 F.3d 763, 765–
66 (6th Cir. 2000) (noting that the publication of notice of
intent to forfeit starts the nonjudicial forfeiture process);
Boero v. DEA, 111 F.3d 301, 304–05 (2d Cir. 1997) (same);
United States v. Clark, 84 F.3d 378, 380 (10th Cir. 1996)
(discussing the FBI’s methods of notifying the defendant of
its intent to forfeit money it had previously seized); Floyd v.
United States, 860 F.2d 999, 1008 (10th Cir. 1988) (noting
that forfeiture proceedings did not begin until notice was
given despite a seizure taking place at an earlier date); United
States v. U.S. Currency in the Amount of $2,857.00, 754 F.2d
208, 211–12 (7th Cir. 1985) (stating that forfeitures begin
with the publication of notice after seizure).8
For the reasons stated, we reject the Langbords’
premise that the Government initiated a “nonjudicial civil
forfeiture proceeding” subject to CAFRA’s ninety-day
deadline. Accordingly, the District Court did not err when it
ordered the Government to pursue a judicial forfeiture of the
8
The Government invites us to hold that nonjudicial
forfeitures under CAFRA commence when it sends notice of
its intent to forfeit the property. We need not reach this issue
because the Government took no steps to forfeit the 1933
Double Eagles.
22
1933 Double Eagles to remedy the Government’s
constitutional violations. 9
B
We next consider the Langbords’ three challenges to
the District Court’s declaratory judgment. First, they claim
that CAFRA is a special statutory proceeding that prohibits
the Government from seeking a declaratory judgment.
Second, they argue that if a declaratory judgment action were
9
Our dissenting colleagues claim that our decision will
“allow the Government to nullify CAFRA’s provisions at
will” on its “say-so that it owns” the disputed property.
Dissent Op. 1. Not so. “CAFRA’s purpose is ‘[t]o provide a
more just and uniform procedure for Federal civil
forfeitures.’” Dissent Op. 5 (emphasis added). Accordingly,
CAFRA applies when the government invokes its forfeiture
power. Permitting the government to pursue its ownership
rights does not eviscerate CAFRA’s procedural protections
for persons whose property is subject to forfeiture because the
rules governing both are different. Cf. United States v. Craig,
694 F.3d 509, 512 (3d Cir. 2012) (distinguishing criminal
restitution from forfeiture). Those who dispute the
government’s claim of ownership have recourse to common
law remedies, such as replevin, which were available long
before CAFRA was enacted and which CAFRA did nothing
to displace. In this case, the Government made no efforts to
institute a nonjudicial forfeiture proceeding, going so far as to
explicitly disclaim the intent to do so. Under these
circumstances, the Government failed to trigger CAFRA's
procedures not by its “say-so,” but by its conduct.
23
appropriate, it had to be submitted to a jury. Finally, they
contend it was an abuse of discretion for the District Court to
allow the Government to seek a declaratory judgment nearly
four years after the litigation began.
1
The Langbords argue that CAFRA constitutes a special
statutory proceeding that precludes the entry of a declaratory
judgment. See Fed. R. Civ. P. 57 advisory committee’s note
to 1937 amendment (“A declaration may not be rendered if a
special statutory proceeding has been provided for the
adjudication of some special type of case . . . .”). We need not
decide this question of first impression, however, because
even if CAFRA were a special statutory proceeding, our
conclusion would be the same: the Government’s declaratory
judgment action was permissible.
The problem for the Langbords is that if CAFRA were
a special statutory proceeding, it would only preclude
declaratory judgments that affect forfeiture. In this case, the
Government did not seek a declaratory judgment in lieu of
forfeiture; it did so in an attempt to quiet title to the Double
Eagles in addition to the court-ordered judicial forfeiture
proceeding. While the declaratory judgment action did turn
on a similar factual predicate as the forfeiture claim (i.e., that
the coins were stolen or embezzled), it used this fact to
establish an independent legal theory, namely, that the
Government was attempting to regain possession of what it
believed to be its own property. As the District Court
persuasively reasoned:
24
[A]lthough CAFRA could be considered the
prosecutor’s remedy, the forfeiture proceeding
only resolves one of the two open questions in
this case: were the Double Eagles stolen from
the Mint and/or possessed by individuals who
knew they were stolen, rendering them
forfeitable under 18 U.S.C. § 641? If the United
States does not meet its burden on the forfeiture
count, whether the Langbords are the legal
owners of the Double Eagles remains
unanswered because a second question—did the
Langbords ever obtain legal title to the Double
Eagles by virtue of their leaving the Mint
through authorized channels?—would remain.
The declaratory judgment count provides a
mechanism for determining the answer to the
second inquiry, relevant because of the United
States’ second role as previous lawful owners—
and according to the United States, perpetually
lawful owners—of the Double Eagles.
Langbord v. U.S. Dep’t of the Treasury, 798 F. Supp. 2d 607,
610 (E.D. Pa. 2011).
In sum, because such a theory does not implicate
forfeiture, it could not be precluded by any special procedures
of CAFRA. To hold otherwise would prevent the Government
from seeking a declaratory judgment in its capacity as a
property owner, which would have the untenable effect of
putting the United States in a worse position than a civilian
property owner—a position at odds with longstanding
precedent. Cf. United States v. California, 332 U.S. 19, 40
(1947) (“[O]fficers who have no authority at all to dispose of
Government property cannot by their conduct cause the
25
Government to lose its valuable rights by their acquiescence,
laches, or failure to act.”); United States v. Steinmetz, 973
F.2d 212, 222–23 (3d Cir. 1992).
For these reasons, the District Court did not err in
allowing the Government to seek a declaratory judgment that
the coins are the property of the United States.
2
The Langbords also contend that once the
Government’s declaratory judgment action was allowed to
proceed, it should have been submitted to the jury. To answer
this question, we ask whether the declaratory judgment action
fits within the pattern of cases typically decided by a court
sitting in equity or whether the case presents an “inverted law
suit” brought by one who would have been a defendant at
common law, which would be for the jury to decide. See
Owens-Illinois, Inc. v. Lake Shore Land Co., 610 F.2d 1185,
1189 (3d Cir. 1979). In adjudicating this question, “federal
not state law is determinative.” Id. (citing Simler v. Conner,
372 U.S. 221, 222 (1963) (per curiam)).
We perceive no error in the District Court’s
conclusion that the Government’s declaratory judgment claim
fits the equitable pattern of an action to quiet title. As the
District Court found: “Here, the Government possesses the
coins and claims rightful ownership, but the Langbords’
assertion that the Double Eagles legally belonged to Israel
Switt and were legally inherited by the Langbord Claimants
clouds the Government’s title.” Langbord, 798 F. Supp. 2d at
611. We agree that such a claim is analogous to a claim to
quiet title. See 5 Charles Alan Wright & Arthur R. Miller,
Federal Practice & Procedure § 1250 (3d ed. 2016)
26
(describing quiet title, traditionally, as an action brought by a
plaintiff who alleges both ownership and possession of
property for which she seeks to uncloud title).
The Langbords challenge this conclusion, arguing that
Pennsylvania law does not provide for an action to quiet title
to personal property. In their view, the absence of a
Pennsylvania counterpart to a suit in equity means that the
Government’s declaratory judgment is more akin to an action
in replevin—a cause of action resolved by juries. We
disagree, principally because the Langbords’ reliance on
Pennsylvania law is misplaced. Determining whether a
declaratory judgment action is tried before a jury is a question
of federal, not state law. Owens-Illinois, 610 F.2d at 1189; see
also Simler, 372 U.S. at 222 (“[T]he right to a jury trial in the
federal courts is to be determined as a matter of federal law in
diversity as well as other actions.”). Thus, we look to whether
the “basic character” of the suit sounds in equity under
federal law. See Simler, 372 U.S. at 222–23; Owens-Illinois,
Inc., 610 F.2d at 1189. And here it clearly does—fitting the
pattern of a quiet title action. See 28 U.S.C. § 2410(a); 28
U.S.C. § 1655; cf. Hoelzer v. City of Stamford, 933 F.2d
1131, 1135–36 (2d Cir. 1991) (deciding a quiet title action for
personal property without submitting the case to a jury).
The Langbords next argue that the Government’s
declaratory judgment claim should have been submitted to the
jury because, had the Government not unconstitutionally
seized the coins, it would have been forced to try a replevin
action to a jury. We decline the Langbords’ invitation to
engage in a hypothetical analysis. In this case, the District
Court remedied the Government’s impermissible seizure of
the coins by ordering a forfeiture action to be filed and did
not require that the coins be returned to the Langbords. The
27
Langbords essentially ask us to supplement this remedy by
asserting that we should determine whether the Government’s
declaratory judgment should have gone to a jury based on the
premise that the Langbords retained possession of the coins.
And they do so without citing precedent or explaining why
the remedy given by the District Court should be displaced on
appeal. Even if we were to find merit in the Langbords’
contention, it does not follow that had the Government not
seized the coins, it would have been forced to bring a replevin
action. The Government would have had other options. For
example, it could have authenticated the coins, returned them
to the Langbords, and then seized the coins pursuant to a
warrant before bringing an action to quiet title. In sum, we see
no good reason to supplement the District Court’s remedy and
we reject the Langbords’ implicit claim that the
unconstitutional seizure was the “but for” cause of the
absence of a jury trial.
Lodging one final attack on the Court’s decision not to
submit the declaratory judgment to the jury, the Langbords
contend that they reserved the right to a jury trial when they
relinquished the coins to the Mint for authentication with the
proviso that they “reserved all rights.” Whatever rights the
Langbords reserved, it would be passing strange for us to
conclude that the right to be sued in replevin was one of them.
Because the Government was under no obligation to file any
action in replevin and had other means to attempt to prove
title to the coins, the Langbords were not entitled to a jury
trial on the Government’s declaratory judgment claim.
3
The Langbords’ final challenge to the District Court’s
declaratory judgment is that the Government forfeited the
28
claim by failing to add it to its counterclaim in a timely
manner. The Federal Rules of Civil Procedure allow for the
liberal amendment of pleadings and the decision whether
such leave should be granted is “committed to the ‘sound
discretion of the district court.’” CMR D.N. Corp. v. City of
Philadelphia, 703 F.3d 612, 629 (3d Cir. 2013) (quoting
Cureton, 252 F.3d at 272). As such, we review a district
court’s determination only for abuse of discretion. Id.“A district court may deny leave to amend . . . if a
plaintiff’s delay in seeking amendment is undue, motivated
by bad faith, or prejudicial to the opposing party.” Cureton,
252 F.3d at 272–73. The mere passage of time “is an
insufficient ground to deny leave to amend.” Id. Nevertheless,
“at some point, the delay will become ‘undue,’ placing an
unwarranted burden on the court, or will become
‘prejudicial,’ placing an unfair burden on the opposing party.”
Id. at 273 (internal quotation marks omitted) (quoting Adams
v. Gould Inc., 739 F.2d 858, 868 (3d Cir. 1984)). In
furtherance of this analysis, courts “focus on the movant’s
reasons for not amending sooner.” Id.Here, the Langbords contend the District Court abused
its discretion by allowing the Government to add its
declaratory judgment claim after the case had been
progressing for nearly four years. In their view, the request to
amend should have been denied because the Government had
no good reason not to amend sooner.
Our review of the record leads us to conclude that the
District Court committed no error when it allowed the
Government to amend its counterclaim. Agreeing with the
Langbords’ arguments in many respects, the District Court
found that the Government’s delay “though significant, was
29
not undue.” Langbord, 749 F. Supp. 2d at 275. In particular,
the District Court noted that the Government did not have a
good reason for its delay because its proffered excuse seemed
like a “strategic choice.” Id. The Court then proceeded to
consider all the other factors that inform the “undue delay”
analysis. Specifically, the Court found that the claim for
declaratory judgment “neither introduce[d] new factual issues
nor revive[d] irrelevant disputes.” Id. at 273, 275. Rather, it
involved matters the Langbords themselves had put at issue in
their complaint––claims that were still unresolved at the time
the Government sought leave to amend. Id. Thus, the Court
found the amendment would put the Langbords in “no worse
a position had the Government brought th[e] counterclaim”
along with its initial answer. Id. And for that reason, the
Court concluded the amendment would neither prejudice the
Langbords, nor place an unwarranted burden on the Court. Id.In so finding, the Court concluded that the Government’s
amendment presented no undue delay. Id. at 275. As we have
noted in previous cases, the District Court here “‘had
considerable familiarity with the development of the factual
and legal issues’ and ‘carefully analyzed the [defendant’s]
proffered reasons for delay, the prejudice to [the plaintiffs],
and the substance of the amended complaint.’” CMR D.N.,
703 F.3d at 631 (quoting Cureton, 252 F.2d at 274). We see
no reversible error in its discretionary decision.
C
The Langbords next claim they are entitled to a new
trial because the District Court committed various evidentiary
errors. They contend: (1) Secret Service reports were
erroneously admitted; (2) documents related to United States
v. Barnard, 72 F. Supp. 531 (W.D. Tenn. 1947), should have
been excluded; (3) evidence related to Israel Switt’s prior
30
arrest and forfeiture of gold should not have been admitted;
and (4) certain testimony of the Government’s expert witness,
David Tripp, should have been excluded. We find no error in
admitting the evidence related to Barnard and Switt’s prior
forfeiture, but we agree with the Langbords that portions of
both the Secret Service reports and Tripp’s testimony should
have been excluded. After examining the entire record of the
case, however, we hold that those evidentiary errors were
harmless.
1
We begin by examining the admission of a number of
Secret Service reports dating back to the 1930s and 1940s.
These documents were admitted under the “ancient
documents” exception to the hearsay rule, which provides that
“[a] statement in a document that is at least 20 years old and
whose authenticity is established” is “not excluded by the rule
against hearsay, regardless of whether the declarant is
available as a witness.” Fed. R. Evid. 803(16); see also Fed.
R. Evid. 901 (providing rules governing the authentication of
ancient documents). The Langbords argue that the District
Court erred in admitting these documents because they
contained hearsay within hearsay and the Court did not
require them to satisfy the multiple-hearsay rule, Fed. R.
Evid. 805 (“Hearsay within hearsay is not excluded by the
rule against hearsay if each part of the combined statements
conforms with an exception to the rule.”).
As the District Court observed, courts have disagreed
about whether the multiple-hearsay rule applies to statements
made in ancient documents. Compare United States v. Hajda,
135 F.3d 439, 443–44 (7th Cir. 1998) (“[If] the [ancient]
document contains more than one level of hearsay, an
31
appropriate exception must be found for each level.”); Hicks
v. Charles Pfizer & Co., 466 F. Supp. 2d 799, 805–07 (E.D.
Tex. 2005) (“Even if a document qualifies as ancient under
Rule 803(16), other hearsay exceptions must be used to
render each individual layer of hearsay admissible.”); United
States v. Stelmokas, 1995 WL 464264, at *6 (E.D. Pa. Aug. 2,
1995), with Langbord v. U.S. Dep’t of the Treasury, 2011 WL
2623315, at *16 (E.D. Pa. July 5, 2011) (citing Murray v.
Sevier, 50 F. Supp. 2d 1257, 1264 n.6 (M.D. Ala. 1999),
vacated on other grounds by Murray v. Scott, 253 F.3d 1308(11th Cir. 2001); Gonzales v. N. Twp. of Lake Cty., 800 F.
Supp. 676, 681 (N.D. Ind. 1992), rev’d on other grounds, 4
F.3d 1412 (7th Cir. 1993); Ammons v. Dade City, 594 F.
Supp. 1274, 1280 n.8 (M.D. Fla. 1984); 2 John W. Strong et
al., McCormick on Evidence § 323 (5th ed. 2003)). See
generally Gregg Kettles, Ancient Documents and the Rule
Against Multiple Hearsay, 39 Santa Clara L. Rev. 719, 752–
60 & nn.161–63 (1999). In our view, stronger precedent
supports the application of Rule 805 to ancient documents.
We are particularly persuaded by the analysis of the
United States District Court for the Eastern District of
Pennsylvania in United States v. Stelmokas. In that case,
Judge DuBois held that ancient documents were subject to
Rule 805 because “hearsay statements contained within an
ancient document lack the same indicia of trustworthiness and
reliability that provide the rationale for admitting statements
when the declarant is the author of the ancient document.”
1995 WL 464264, at *6. The court noted that the exception
“is based on a rationale that authenticated ancient documents
bear certain indicia of trustworthiness,” namely: (1) a lack of
motive to fabricate due to the document’s age; (2) the writing
requirement “minimizes the danger of mistransmission”; and
32
(3) “the document is more likely to be accurate than the oral
testimony of the declarant based on his memory of events of
twenty or more years ago.” Id. at *5 (citing 2 John W. Strong
et al., McCormick on Evidence § 322 (4th ed. 1992); Charles
E. Wagner, Federal Rules of Evidence Commentary 452
(1993); 4 Jack B. Weinstein & Margaret A. Berger,
Weinstein’s Evidence ¶ 803(16)(1) (1994)). While these
indicia of trustworthiness justified admitting the ancient
document as such, they did not justify admitting hearsay
statements contained therein:
[T]here is no guarantee that a hearsay statement
contained in the [ancient document] is accurate.
The author of the ancient document may have
misheard or misunderstood the hearsay
statement or his written words may not convey
the meaning intended by the hearsay declarant.
These issues of perception and narration are not
merely peripheral but are fundamental problems
of hearsay evidence.
Id. at *6; see also Daniel J. Capra, Electronically Stored
Information and the Ancient Documents Exception to the
Hearsay Rule: Fix It Before People Find Out About It, 17
Yale J.L. & Tech. 1, 9 n.32 (2015) (“[T]he ancient documents
exception does not abrogate the rule on multiple hearsay
imposed by Rule 805—at least in the view of right-thinking
courts.”).10
10
Since 1996, Professor Capra has been the Reporter
for the Judicial Conference’s Advisory Committee on the
Federal Rules of Evidence. The Rules Committee recently
proposed to eliminate the ancient documents exception to the
33
The District Court and the Government rely principally
on treatises that disagree with the multiple-hearsay rule’s
application out of fear that requiring a separate exception for
each level of hearsay would eviscerate the ancient documents
exception. See Langbord, 2011 WL 2623315, at *16–17;
Gov’t Br. 40–41; see also 30C Michael H. Graham, Federal
Practice and Procedure § 7057 n.1 (2014) (stating that
requiring establishment of a different hearsay exception for
the embedded hearsay statements “would effectively
emasculate Rule 803(16)’s utility as it did in Hicks”).
Alternatively, the District Court reasoned that the multiple-
hearsay rule was satisfied because “Rule 803(16) supplies the
grounds by which each level within an ancient document
becomes admissible.” Langbord, 2011 WL 2623315, at *17.
We are unpersuaded, largely because the rationale justifying
the ancient documents exception does not apply to the
admission of hearsay statements embedded within the
documents. Stelmokas, 1995 WL 464264, at *5–6.
We therefore hold that the District Court abused its
discretion by admitting the hearsay embedded within Secret
rule against hearsay in a draft Committee Note published on
August 14, 2015. See Committee on Rules of Practice and
Procedure of the Judicial Conference of the United States,
Preliminary Draft of Proposed Amendments to the Federal
Rules of Evidence (Aug. 14, 2015), available at
http://www.uscourts.gov/file/18375/download. The draft
Committee Note bluntly asserts that “[t]he exception was
based on the flawed premise that the contents of a document
are reliable merely because the document is old” and the rule
“could have once been thought tolerable out of necessity.” Id.at 25–26.
34
Service reports into evidence without applying Rule 805. In
so holding, we emphasize that this error does not render the
Secret Service reports inadmissible in toto. Rather, first-level
hearsay remains admissible as Rule 805 does not apply to
those statements and their use is permitted by Rule 803(16)
(the ancient documents exception).
2
The Langbords’ second evidentiary objection concerns
the introduction of the opinion and findings of fact from
United States v. Barnard, 72 F. Supp. 531 (W.D. Tenn.
1947). In Barnard, the United States filed a replevin action
against a coin collector to recover a 1933 Double Eagle and
the judge found that the coin at issue had not left the
Philadelphia Mint legally. 72 F. Supp. at 532. On initial
review of the Barnard documents in the Langbords’ case, the
District Court found them admissible under the ancient
documents exception to the hearsay rule. Langbord, 2011 WL
2623315, at *5. But after examining them under Federal Rule
of Evidence 403, the Court found the documents admissible
only for two purposes: to demonstrate that Israel Switt had
notice that the coins were stolen and to help the jury evaluate
expert David Tripp’s testimony under Federal Rule of
Evidence 703. Id. at *5–6.
On appeal, the Langbords insist that the Barnard
documents should have been excluded for four reasons. Their
first objection—that the documents were hearsay—is a
nonstarter for the obvious reason that they were not offered to
prove the truth of their contents. See Fed. R. Evid. 801(c)(2).
Second, the Langbords claim that the Barnard
documents, even if not hearsay, should have been excluded
35
because they were irrelevant. In their view, the Government
was unable to prove Switt was aware of the Barnard opinion
because it could not show that he read either the opinion,
news articles discussing the opinion, or an article about the
case in The Numismatist (a journal for coin dealers). As such,
the Barnard opinion could not have put Switt on notice that
holding the 1933 Double Eagles was illegal. As we shall
explain, these arguments do not satisfy the high bar for
establishing irrelevance.
Evidence is relevant so long as it has “any tendency to
make the existence of any fact that is of consequence to the
determination of the action more probable or less probable
than it would be without the evidence.” United States v.
Sriyuth, 98 F.3d 739, 745 (3d Cir. 1996) (quoting Fed. R.
Evid. 401). “When the relevance of evidence depends on
whether a fact exists, proof must be introduced sufficient to
support a finding that the fact does exist.” Fed. R. Evid.
104(b). To determine whether the Government has met this
burden, “[t]he court simply examines all the evidence in the
case and decides whether the jury could reasonably find the
conditional fact . . . by a preponderance of the evidence.”
Huddleston v. United States, 485 U.S. 681, 690 (1988).
In light of all the evidence, the District Court did not
abuse its discretion by determining that a jury could
reasonably find by a preponderance of the evidence that Switt
was aware of the Barnard documents. This is true for several
reasons. First, the Government presented evidence that Switt
was in the business of dealing coins and had dealt in 1933
Double Eagles. Second, Switt was questioned by the Secret
Service and had been tied to the coin at issue in Barnard.
Finally, the case made national news and was discussed in
The Numismatist.
36
The Langbords argue alternatively that the Barnard
documents should have been excluded under Federal Rule of
Evidence 403 because their probative value was outweighed
by their prejudicial impact. According to the Langbords, the
documents lacked probative value because, if not taken for
their truth, they could show only that the Government
believed that the coins were stolen and sought to recover
them. In other words, the Government’s belief that the coins
were stolen could not provide Switt with knowledge that they
were, in fact, stolen. Thus, they were minimally probative of
Switt’s notice that he could not lawfully possess the coins.
The Langbords have not satisfied the exacting standard
of Rule 403. We may overturn a district court’s decision
under this rule only if “it is ‘arbitrary and irrational.’” Bhaya
v. Westinghouse Elec. Corp., 922 F.2d 184, 187 (3d Cir.
1990) (quoting United States v. DePeri, 778 F.2d 963, 973–
74 (3d Cir. 1985)). Even if we were to credit the Langbords’
distinction between “Switt’s knowledge” and the
“Government’s belief,” the Barnard documents are
nonetheless probative of Switt’s knowledge because they
provided some notice of the dubiousness of one’s right to
possess a 1933 Double Eagle because the United States had
actively sought their return as stolen government property.
And this probative value was not substantially outweighed by
the risk of unfair prejudice, especially in light of the fact that
the District Court instructed the jury as to how the Barnard
evidence could be used.
Finally, the Langbords claim the District Court abused
its discretion by admitting the Barnard documents under
Federal Rule of Evidence 703 because the Government’s
expert, David Tripp, neither explicitly mentioned Barnard as
evidence underlying his opinion nor referred to it in
37
explaining his conclusions. In fact, Tripp did refer to Barnard
while summarizing his opinion and the material underlying
that opinion.11 And Tripp’s testimony and its context
demonstrate that he used Barnard as a basis for his opinion.
Because this is precisely what Rule 703 anticipates, we find
no abuse of discretion.12
11
Immediately after Tripp mentioned Barnard, the
Langbords asked for an instruction on the use of the opinion.
The Court obliged and explained the purpose of the Barnard
evidence.
12
The Langbords lodge one more challenge against the
Barnard documents, arguing that even if they were
admissible, the Government improperly invoked them in a
manner that invited the jury to consider them for their truth.
This allegedly occurred on five occasions: twice by Tripp,
who referred to the case as showing that the Langbord coins
were illegally taken from the Mint instead of the Barnard
coin, and on three other occasions during the Government’s
closing argument.
In regard to the two Tripp statements, neither commit
the mistake alleged by the Langbords. When read in context,
both statements discuss the Barnard opinion alone and do not
assert that the decision is determinative of the propriety of the
Langbords’ claim to the Double Eagles at issue here. Further
tempering any such concerns, the District Court described the
role of expert witnesses and explained that the Barnard
evidence adverted to by Tripp could be used only to evaluate
the basis upon which he grounded his opinion and was not
determinative of the Langbords’ case. This limiting
instruction helped ensure that the jury understood the proper
purpose of Tripp’s use of the Barnard evidence.
38
For all the reasons stated, we hold the District Court
did not err in admitting the Barnard documents.
3
Next, the Langbords contend that evidence that Israel
Switt forfeited 98 gold coins that he possessed in
contravention of the Gold Reserve Act of 1934 should have
been excluded. The Government sought to introduce
documents from this forfeiture to prove that Switt was aware
of the repercussions of holding coins illegally and that he was
motivated to conceal 1933 Double Eagles.
The Langbords argue that the District Court abused its
discretion by admitting this evidence for three reasons: (1) it
was improper character evidence used to show Switt had a
propensity to unlawfully hoard coins; (2) it was not relevant
as the prior forfeiture took place under the Gold Reserve Act
while this forfeiture was brought under CAFRA; and (3) even
if the past forfeiture was relevant, its probative value was
outweighed by its unfair prejudice.
As for the Government’s alleged misuse of the
evidence during closing arguments, the Langbords did not
object to the Government’s three references to the Barnard
documents in its closing. We find no plain error because the
Langbords’ substantial rights were not affected and the
comments did not “seriously affect[] the fairness, integrity or
public reputation of judicial proceedings.” Han Tak Lee v.
Houtzdale SCI, 798 F.3d 159, 166 (3d Cir. 2015) (quoting
Nara v. Frank, 488 F.3d 187, 197 (3d Cir. 2007)). These three
brief comments were made before the District Court cured
any possible confusion by explaining in a detailed manner to
what extent the Barnard documents could be considered.
39
Federal Rule of Evidence 404(b) prohibits the use of
information regarding an individual’s prior bad acts as
evidence that the person has the propensity to act in such a
manner. Of course, prior bad acts may be admitted for
purposes other than propensity. Fed. R. Evid. 404(b)(2). The
Government contends that evidence of Switt’s prior forfeiture
of 98 gold coins demonstrated his knowledge that it forfeits
illegally held coins and provided a motive to conceal 1933
Double Eagles to avoid this fate. We agree. Accordingly,
these two uses of the evidence from Switt’s prior forfeiture do
not go to his propensity and therefore were not excludable
under Rule 404(b).
With proper purposes identified, the Government must
then demonstrate that the evidence it seeks to introduce is
relevant for those purposes—meaning that it had “any
tendency” to make a consequential fact “more or less
probable than it would be without the evidence,” Fed. R.
Evid. 401; see also, e.g., United States v. Caldwell, 760 F.3d
267, 277–78 (3d Cir. 2014). The Langbords insist the
Government failed to do so because the forfeiture Switt
suffered was effectuated under the Gold Reserve Act while
this forfeiture proceeded under CAFRA. They also emphasize
that the Gold Reserve Act allowed the Government to forfeit
coins possessed in contravention of the Act, while CAFRA
permits the forfeiture of stolen goods. Thus, having coins
forfeited for possessing them against the dictates of the Gold
Reserve Act is not probative of either notice to Switt that the
Government also forfeits stolen coins or Switt’s motivation to
conceal the coins to avoid this type of forfeiture. We disagree.
While Switt’s prior forfeiture and the one at issue here
do arise from different legal bases, the fact that Switt had
previously forfeited gold coins to the Government is relevant
40
to his knowledge that holding gold coins may be unlawful
under certain circumstances. His prior loss of gold coins
through a forfeiture proceeding also made it more likely that
Switt would conceal any other coins he possessed for fear of
losing them as well.
Nor was this evidence excludable under Rule 403
balancing. In support of their contention that the evidence’s
unfair prejudice exceeded its probative value, the Langbords
point to various instances where the evidence was used at
trial. Langbord Br. 58–60. In particular, they direct us to the
facts that the Government: (1) mentioned Switt’s prior arrest
on too many occasions; (2) stated Switt was “known to the
Secret Service,” “knew how to deal with law enforcement,”
“was angry with the Government,” wanted to “thumb his nose
at the Government,” and failed to relinquish his gold coins in
the manner “all other citizens did;” and (3) elicited expert
testimony on two occasions that Switt failed to carry out his
patriotic duty by not turning the coins over to the
Government. Langbord Br. 58–59. According to the
Langbords, these uses demonstrate the prejudice posed by the
evidence and it should have been excluded outright.
While posing some prejudice to the Langbords, we
cannot conclude that the District Court’s determination that
such prejudice failed to outweigh the evidence’s probative
value was “arbitrary and irrational.” Bhaya, 922 F.2d at 187
(quoting DePeri, 778 F.2d at 973–74). In deciding to admit
the evidence over the Langbords’ objection, the District Court
carefully weighed its probative value and possible prejudicial
impact. The Court found the fact that the evidence spoke to
Switt’s knowledge and motivation at the time in which the
Double Eagles were allegedly concealed particularly
probative as to whether a violation of 18 U.S.C. § 64141
occurred. Langbord, 2011 WL 2623315, at *5–6. With that
said, the Court acknowledged that some prejudice would
inure, but determined that the balance tipped in favor of
admitting the evidence. Id. at *8. This quintessential
judgment call by the District Court was not an abuse of
discretion.
4
For their final evidentiary objection, the Langbords
assert that the Government’s expert, David Tripp, transmitted
inadmissible hearsay to the jury without drawing upon any
specialized knowledge and that this hearsay’s probative value
did not substantially outweigh its prejudicial effect. Langbord
Br. 60–62 (citing Fed. R. Evid. 702, 703; United States v.
Mejia, 545 F.3d 179 (2d Cir. 2008)). Specifically, the
Langbords cite Tripp’s statements regarding Barnard, his
testimony about Switt’s prior forfeiture, and his summaries of
the Secret Service reports we discussed previously.
We turn first to the Langbords’ argument that Tripp’s
testimony was not supported by specialized knowledge. We
have interpreted Federal Rule of Evidence 702 to impose a
“trilogy of restrictions on expert testimony: qualification,
reliability and fit.” Schneider ex rel. Estate of Schneider v.
Fried, 320 F.3d 396, 404 (3d Cir. 2003). The third of these
requirements, “fit,” is at issue here. In order to satisfy that
requirement of Rule 702, an “expert’s testimony must be
relevant for the purposes of the case and must assist the trier
of fact.” Id.; see also Fed. R. Evid. 702(a) (stating as a
condition for admitting an expert’s testimony that “the
expert’s scientific, technical, or other specialized knowledge
will help the trier of fact to understand the evidence or to
determine a fact in issue”); United States v. Ford, 481 F.3d
42215, 218–19 (3d Cir. 2007). To the Langbords, Tripp was a
mere conduit for transmitting inadmissible hearsay to the jury
by reading documents to them. We disagree.
As a historian, the tools of Tripp’s trade include old
documents regarding past events such as the Barnard opinion,
accounts of Switt’s prior forfeiture, and the Secret Service
reports. To fulfill his role as an expert witness, Tripp was
obliged to help the jury understand the historical background
of the 1933 Double Eagles. He did so by “‘surveying a
daunting amount of historical sources,’ evaluating their
reliability and providing a basis for ‘a reliable narrative about
that past.’” United States v. Kantengwa, 781 F.3d 545, 562
(1st Cir. 2015) (quoting Alvaro Hasani, Putting History on
the Stand: A Closer Look at the Legitimacy of Criticisms
Levied Against Historians Who Testify as Expert Witnesses,
34 Whittier L. Rev. 343, 354–55 (2013)). And while the
Langbords are correct that Tripp read portions of his source
material verbatim to the jury, the excerpts he chose from
voluminous historical materials provided context and
explained past events. See id.; Marvel Characters, Inc. v.
Kirby, 726 F.3d 119, 135–36 (2d Cir. 2013) (noting that
“synthesiz[ing] dense or voluminous historical texts” and
offering “context that illuminates or places in perspective past
events” are proper uses of historical expertise). Unlike in
Mejia, where an expert’s testimony was found inadmissible
because he merely summarized law enforcement’s
straightforward investigation against the defendant as a
shortcut to proving the elements of the crime without
synthesis, see Mejia, 545 F.3d at 190–91, 194–98, Tripp’s
testimony synthesized disparate and voluminous historical
sources and provided the jury his opinion on the fate of the
43
1933 Double Eagles. There was no error in allowing Tripp to
testify in this manner.
Next, we consider the Langbords’ related argument
that Tripp’s testimony contained inadmissible hearsay that
should have been excluded under Federal Rule of Evidence
703. That Rule provides that an expert may base his opinion
on otherwise inadmissible evidence so long as other “experts
in the particular field would reasonably rely on those kinds of
facts or data in forming an opinion on the subject.” This
inadmissible information may be disclosed to the jury only if
its “probative value in helping the jury evaluate the opinion
substantially outweighs [its] prejudicial effect.” Fed. R. Evid.
703. As provided by the Committee Notes to the 2000
amendments to Rule 703, courts need not engage in this latter
balancing inquiry if the facts or data at issue are “admissible
for any other purpose” aside from “assist[ing] the jury to
evaluate the expert’s opinion.”
On this point, most of the Langbords’ arguments
evaporate in light of our preceding analysis. As we have
already discussed, the first-level hearsay found in the Secret
Service reports, the Barnard opinion, and information related
to Switt’s prior forfeiture are all admissible. Because they are
admissible for a purpose other than “assist[ing] the jury to
evaluate” Tripp’s opinion, we need not engage in the Rule
703 balancing inquiry and Tripp was free to convey the
information to the jury.
Nevertheless, one portion of the Langbords’ argument
survives—the challenge to Tripp’s invocation of the
embedded hearsay contained in the Secret Service reports that
we previously held inadmissible. And we agree with the
Langbords that this testimony’s probative value did not
44
substantially outweigh its prejudicial impact. While
probative, the testimony was cumulative because it recounted
interviews and reports that were later compiled into a final
report that contained their most important information in
admissible form—i.e. that the coins were stolen from the
Mint and landed in Switt’s possession. At the same time, this
testimony posed additional prejudice to the Langbords
because it included speculation and characterization of events
by out-of-court declarants that was adverse to the Langbords’
position. For this reason, we find that it was an abuse of
discretion to permit Tripp to testify to the embedded hearsay
within the Secret Service reports.
5
While we have found evidentiary errors regarding
portions of the Secret Service reports and portions of Tripp’s
testimony about them, a new trial is appropriate only when “a
substantial right of the party is affected.” Becker v. ARCO
Chem. Co., 207 F.3d 176, 180 (3d Cir. 2000) (quoting Glass
v. Phila. Elec. Co., 34 F.3d 188, 191 (3d Cir. 1994)); see also
Fed. R. Evid. 103(a). We find such an error harmless when
there is a “high probability” that the discretionary error did
not contribute to the verdict. McQueeny v. Wilmington Trust
Co., 779 F.2d 916, 924–25 (3d Cir. 1985). Our review of the
entire record leads us to conclude that the Government was
able to clearly and convincingly prove the elements of its case
without reliance on the tainted evidence. Accordingly, for the
reasons we shall explain, we conclude that the evidentiary
errors were harmless.
45
a
To prevail on its forfeiture action, the Government
needed to prove the Double Eagles “constitue[d] or [were]
derived from the proceeds traceable to . . . any offense
constituting ‘specified unlawful activity’ (as defined in [18
U.S.C. § 1956(c)(7)]),” 18 U.S.C. § 981(a)(1)(C). “Specified
unlawful activity” under § 1956(c)(7) includes stealing or
embezzling “a thing of value of the United States” or
receiving, concealing, or retaining such an item with the
intent to convert it to one’s own use while knowing it was the
product of theft or embezzlement. See 18 U.S.C.
§ 1956(c)(7)(D); id. § 641; Morissette v. United States, 342
U.S. 246, 263, 279 (1952). Thus, the Government had to
prove that: (1) the Double Eagles were things of value; (2)
they were stolen or embezzled; and (3) whoever stole or
embezzled the coins knew he was doing so or whoever
received, concealed, or retained the coins knew that they were
stolen or embezzled and nonetheless intended to use them for
personal gain. Only the second and third elements are
disputed and the Government’s admissible evidence in this
case clearly established both.
b
The evidence at trial demonstrated overwhelmingly
that no 1933 Double Eagle ever left the Mint through
authorized channels and any that did were either stolen or
embezzled. Within 24 hours of his inauguration on March 4,
1933, President Roosevelt issued a proclamation that banned
the payout of gold coin from banks and the Treasury. On
March 9, Congress codified this presidential order. Not until
six days later, on March 15, 1933, did the first 1933 Double
Eagles arrive at the Cashier’s office of the Philadelphia
46
Mint—the office that serves as the “gatekeeper,” taking
newly minted coins and releasing them to the public. A few
weeks later, on April 5, 1933, President Roosevelt issued
another proclamation ordering that all gold in private hands
be returned to the Government.13 And on January 30, 1934,
Congress passed the Gold Reserve Act which stated that all
gold was to be nationalized and the Government’s holdings
were to be melted into gold bars.
The aforementioned legal framework dictated that no
1933 Double Eagles could lawfully be issued to the public.
The coins arrived at the Cashier’s office after Congress had
forbidden the payout of gold. And any coins that left the Mint
were required to have been returned under the direction of
President Roosevelt’s April 5 proclamation. The next year, by
January 30, 1934, all the coins were ordered to be melted.
The Langbords nonetheless contend that 1933 Double
Eagles may have left the Mint because of miscommunication
or mistake. In particular, they point to a window of time
between March 7 and April 12, 1933, during which the coins
may have left the Mint via innocent means. On March 7, an
Assistant Treasury Secretary informed the Mint that gold coin
or bars could be issued in exchange for bullion. This
information was at odds with President Roosevelt’s inaugural
13
This proclamation contained an exception that
allowed collectors to retain coins of rare or unusual interest.
This exception would not have applied to the 1933 Double
Eagles when the proclamation was issued, however, because
the fact that the coins were being struck by the hundreds of
thousands made the 1933 Double Eagles neither rare nor
unusual—a fact on which both the Government’s and
Langbords’ experts agreed.
47
proclamation and Congress’s March 9 codification of that
proclamation. And the Mint was not instructed in a letter from
the Treasury to halt gold exchanges until April 12, 1933. The
parties (and their experts) therefore dispute whether gold
intended for private use could have left the Mint during this
time. But regardless of whether this window actually existed,
the Mint’s own records from the relevant years show that no
1933 Double Eagle ever left the Mint through authorized
channels.
The Mint’s records track the movement of each 1933
Double Eagle. These records were remarkably detailed, going
so far as to show the payment of three pennies and their year
of minting in one transaction. The records indicate that
445,500 Double Eagles were struck. Five hundred of those
were sent to the Cashier, while the remaining 445,000 were
sealed in a basement vault. Of the 500 held in the Cashier’s
office, 29 were destroyed in tests to determine the coins’
purity and weight, 2 were sent to the Smithsonian, and the
remaining 469 were placed in the basement vault. Then, in
accordance with the Gold Reserve Act of 1934, the 445,469
coins left in the vault were ordered melted into gold bars. By
this accounting, it is clear that not a single 1933 Double Eagle
was ever authorized to be issued to the public—a fact to
which both a 1933 Double Eagle historian and a forensic
accountant testified.
The Langbords try mightily to discredit these records,
but fail to do so in a meaningful way. They claim the records
are not reliable for three reasons. First, they argue that Mint
employees “disregarded regulations governing quality control
and bookkeeping audits,” Langbord Br. 14, as evidenced by
the fact that the Cashier failed to properly select coins for the
48
assay process,14 and that the Mint’s holdings and records may
not have been audited as frequently as regulations required.
Neither of these concerns raises serious reliability
questions—selecting the right coin for the assay process has
little to do with the number of coins held by the Mint and the
absence of a timely audit of the Mint’s holdings does not
indicate that the records actually contain errors.
Second, the Langbords note the fact that Mint records
show the release of only four 1933 Eagles (not Double
Eagles) while more than that are privately held today.
Without more, this fact does little to discredit the records.
These alleged errors do not involve 1933 Double Eagles and
the lost 1933 Eagles may not have been logged in the Mint
records because they too may have left the Mint illegally.
And finally, the Langbords argue that the records fail
to show the release of gold coins on certain dates when other
documents show that disbursements did in fact occur. As the
Government explained at trial, however, this argument is
factually incorrect because the documents to which the
Langbords refer show only that individuals asked for gold
coin in return for deposits of gold bullion, not that gold coin
was actually paid out.15 Mint regulations corroborate the
14
An “assay” is a scientific process used by the Mint
to test the purity of the gold contained in a given coin. The
process results in the destruction of the tested coin.
15
The Langbords also offer the possibility that 1933
Double Eagles mistakenly left the Mint through “unclassified
counter cash” which was not broken down by denomination.
In support of this argument, the Langbords cite a statement
made by David Tripp in a deposition in which he indicated
that gold coins may have been part of this counter cash. At
49
Government’s theory by stating that gold would be paid out
only if requested and available—otherwise, requests would be
fulfilled by check.
Beyond the Mint records, the Government introduced
evidence to show that the coins were either stolen or
embezzled. In particular, the Government pointed to a Secret
Service report regarding its investigation following the
appearance of 1933 Double Eagles after all the coins should
have been destroyed. The report’s final conclusion stated that,
in the opinion of the Secret Service, none of the 1933 Double
Eagles that had surfaced ever left the Mint through authorized
channels. Thus, the Secret Service report and the Mint records
reflect the same conclusion that the 1933 Double Eagles had
left the Mint illegally.16
trial, however, Tripp stated that additional research led him to
the conclusion that gold coins were in fact not part of the
counter cash and that 1933 Double Eagles could not have left
the Mint via that manner. While the Langbords dispute this
point, the fact of the matter remains that the Mint records
account for every 1933 Double Eagle and do not show that
any one of them left the Mint through authorized channels.
16
The relevant portion of the Secret Service’s final
report does not contain multiple hearsay. See App. 5025
(“The matter having been discussed [with Mint officials] . . .
the opinion prevails that all of the [1933 Double Eagles]
known to be in unauthorized circulation are the property of
the Government.”). Rather, it recounts the conclusion of the
Secret Service investigators, which is first-level hearsay
admissible under the ancient documents rule.
50
In sum, considering the record as a whole, we have no
doubt that any evidentiary errors were harmless as they relate
to the jury finding that the coins were either stolen or
embezzled from the Mint.
c
Next, the Government was required to show that
whoever stole or embezzled the coins knew he was doing so
or whoever received, concealed, or retained the coins, knew
that the coins were stolen or embezzled and nonetheless
intended to use them for his own gain. In light of the passage
of so many decades, it is unsurprising that direct evidence of
intent is lacking in this case. Such evidence is not required,
however, because “a jury may draw inferences of subjective
intent from evidence of . . . objective acts, and from
circumstantial evidence.” United States v. Piekarsky, 687
F.3d 134, 147–48 (3d Cir. 2012). Here, there is overwhelming
circumstantial evidence in support of the Government’s case.
For starters, we recall the evidence which shows that
no 1933 Double Eagle ever left the Mint through authorized
channels. And if the Mint never meant to issue the coins, its
records show they were never issued, and the Secret Service
concluded none were authorized to leave the Mint, it follows
that the illicit taking and retention of the coins is the only
plausible explanation for how ten 1933 Double Eagles ended
up in the safe-deposit box of Israel Switt’s heirs.
The Government’s evidence did not stop there.
Turning back to the reports from the Secret Service’s
investigation of 1933 Double Eagles that surfaced in the
1940s, the Government showed that Israel Switt was
interviewed by Secret Service agents to determine his
51
connection to the coins that had left the Mint. That
investigation led the Secret Service to conclude that all of the
Double Eagles that made it into private hands were connected
to Switt. The fact that Switt had been involved in the
dissemination of 1933 Double Eagles and that he had been
investigated by the Secret Service for doing so provide strong
evidence that he knew the coins were stolen or embezzled and
that the Government sought their return.
Moreover, the Government pointed to Barnard and
related documents as providing a reason to think Switt knew
the Double Eagles were stolen or embezzled. Those
documents—the publication of the opinion in 1947, a news
report covering the case in the New York Times, and an article
in The Numismatist about the matter—all make it more likely
that Switt would have been aware of the controversy
surrounding the legality of holding 1933 Double Eagles.
Finally, yet another body of evidence points to Switt
knowing the coins were stolen or embezzled: the documents
demonstrating that the Government forfeited 98 gold coins
Switt possessed in contravention of the Gold Reserve Act of
1934. This forfeiture showed that Switt had knowledge that
holding gold coins was impermissible and could result in
adverse government action. It also evidences Switt’s motive
to conceal the coins.
Taking all of this evidence together, the Government
showed that Switt knew that the 1933 Double Eagles were
embezzled or stolen and that it was illegal to possess them.
Yet they were stored in a safe-deposit box for decades until
his daughter disclosed their whereabouts soon after the
Fenton-Farouk coin was auctioned for $7,590,020. These
circumstances are more than sufficient to find a violation of
52
18 U.S.C. § 641 and renders the District Court’s evidentiary
errors harmless.
D
The Langbords’ last line of attack on the District
Court’s judgment is that the Court erroneously instructed the
jury on two elements of the Government’s forfeiture case.
First, they claim the District Court improperly instructed the
jury on the mens rea necessary to establish liability under 18
U.S.C. § 641. Second, they argue that the District Court
should have required the jury to find a violation of § 641
occurring after 1948, the year of the statute’s enactment.17
1
In Morissette, the Supreme Court held that, in the
absence of an express intent requirement in § 641, Congress
“borrow[ed] terms of art in which are accumulated the legal
tradition and meaning of centuries of practice,” and that a
conviction under the statute requires a jury to find “the
criminal intent . . . wrongfully to deprive another of
possession of property.” 342 U.S. at 263, 276 (emphasis
added); see also, e.g., United States v. Crutchley, 502 F.2d
17We review the District Court’s refusal to give a
requested jury instruction for abuse of discretion. See United
States v. Friedman, 658 F.3d 342, 352 (3d Cir. 2011). “Where
a party properly objects to a jury instruction under [Federal
Rule of Civil Procedure] 51, we exercise plenary review to
determine whether the instruction misstated the applicable
law.” Collins v. Alco Parking Corp., 448 F.3d 652, 655 (3d
Cir. 2006) (citation omitted).
53
1195, 1201 (3d Cir. 1974) (stating that the “essential part of
the common law larceny-type offense” was that “the thief . . .
knew [that the property he took] did not belong to him”
(quoting United States v. Howey, 427 F.3d 1017, 1017–18
(9th Cir. 1970)); United States v. Caverly, 408 F.2d 1313,
1320 n.5 (3d Cir. 1969).
The District Court’s instructions conveyed exactly this
point of law. The Court instructed the jury that it was required
to find that “whoever stole or embezzled [the 1933 Double
Eagles] did so knowingly,” and that “to steal means to take
somebody else’s property without permission with the
intention of permanently keeping it.” App. 2702 (emphasis
added) (also defining embezzlement as “to knowingly and
intentionally take somebody else’s property with the intent to
permanently keep it by virtue of your employment or your
position of trust”).
The Langbords nevertheless contend that the District
Court misstated the law when it further elaborated that
“knowingly means that you’re conscious and aware of what
you’re doing. Right? It means that you’re exercising a choice,
a deliberate choice. It’s not an accident. It’s not a mistake.”
App. 2702. We disagree.
As an initial matter, the District Court’s definition of
“knowingly” accords with our model instruction. See Third
Circuit Model Criminal Jury Instruction 5.02 (revised Apr.
2015) (“knowingly” means that the defendant was “conscious
and aware of the nature of [his or her] actions and of the
surrounding facts and circumstances, as specified in the
definition of the offense(s) charged” (emphasis added)). And
in conjunction with the District Court’s definition of “steal,”
the jury was required to find that whoever took the coins was
54
“conscious and aware” that they were “somebody else’s
property.” App. 2702 (also stating that the jury was required
to find “improper” or “guilty knowledge”). Of course, taken
in isolation, the definition of knowingly—because it does not
specify what knowledge is required—could simply require
mere intentionality of the kind rejected in Morissette. But we
do not review jury instructions in isolation as the Langbords
tacitly propose. See, e.g., Limbach Co. v. Sheet Metal
Workers Int’l Ass’n, AFL–CIO, 949 F.2d 1241, 1258–59 n.15
(3d Cir. 1991) (“When interpreting jury instructions, the
reviewing court considers the totality of the instructions and
not a particular sentence or paragraph in isolation.”).18 The
18
The Langbords also insist the District Court erred by
refusing to instruct the jury that a violation of § 641 had to be
“willful.” A linguistic “chameleon,” see, e.g., United States v.
Starnes, 583 F.3d 196, 210 (3d Cir. 2009) (citing Bryan v.
United States, 524 U.S. 184, 191 & n.12 (1998)), the word
“willful” is not found in the statute. It is therefore
unsurprising that a number of our sister circuits have declined
to promulgate model instructions that include a willfulness
charge. See Committee on Pattern Jury Instructions, District
Judges Association, Fifth Circuit, Pattern Jury Instructions
(Criminal Cases) 180–82 (2015) (Instruction No. 2.27);
Committee on Federal Criminal Jury Instructions of the
Seventh Circuit, Pattern Criminal Jury Instructions of the
Seventh Circuit 196–98 (2012); Judicial Committee on Model
Jury Instructions for the Eighth Circuit, Manual of Model
Criminal Jury Instructions for the District Courts of Eighth
Circuit 221–22 § 6.18.641 (2014) (revised Aug. 5, 2014);
Ninth Circuit Jury Instructions Committee, Manual of Model
Criminal Jury Instructions 178–79 (2010) (Instruction Nos.
8.39 and 8.40); Criminal Pattern Jury Instruction Committee
55
District Court properly instructed the jury on the mens rea
required by § 641.
2
The Langbords’ last objection concerns the District
Court’s instruction that a theft under § 641 rendering the 1933
Double Eagles subject to forfeiture could have occurred
“some time in the past.” App. 2702. The Langbords claim that
the jury should have been instructed that it was required to
find a theft occurring after 1948, the year Congress enacted
the statute. This contention betrays a misunderstanding of the
of the United States Court of Appeals for the Tenth Circuit,
Criminal Pattern Jury Instructions 119–20 (2011) (revised
Sept. 10, 2015); see also Committee on Pattern Jury
Instructions of the Judicial Council of the Eleventh Circuit,
Pattern Jury Instructions (Criminal Cases) 36, 177–79 (2010)
(dividing willfulness offenses into those with an ordinary
general intent requirement, and “highly technical [offenses]
that present the danger of ensnaring individuals engaged in
apparently innocent conduct”).
The District Court accordingly did not abuse its
discretion in declining to give the Langbords’ requested
charge to the jury. See United States v. Croft, 750 F.2d 1354,
1362 (7th Cir. 1984) (“[N]o particular verbal formula or
talismanic combination of words is required to properly
allege the element of specific intent . . . under 18 U.S.C.
§ 641.”). We also note that the Langbords’ proposed
definition of willfulness—requiring knowledge of
unlawfulness—does not differ meaningfully from the “guilty
knowledge” that the District Court required the jury to find.
See App. 2702.
56
interplay between 18 U.S.C. §§ 981 and 1956(c)(7), and the
retroactive application of civil statutes.
In addition to reforming several procedural aspects of
civil asset forfeiture, CAFRA vastly expanded the scope of
property subject to forfeiture by amending 18 U.S.C.
§ 981(a)(1)(C)—the statute authorizing forfeiture in this
case—to include “any offense constituting ‘specified
unlawful activity’ (as defined in section 1956(c)(7)).” See Pub
L. No. 106-185, § 20, 114 Stat. 202, 224 (2000); United
States v. All Funds Distributed to Weiss, 345 F.3d 49, 52–53
& n.2 (2d Cir. 2003) (observing that prior to CAFRA’s
inclusion of “specified unlawful activity” in § 981(a)(1)(C),
the Government could seek forfeiture only through a violation
of the money laundering statutes, 18 U.S.C. §§ 1956, 1957,
and 1960, listed in § 981(a)(1)(A)). Then, as now, §
1956(c)(7) provided that “[t]he term ‘specified unlawful
activity’ means . . . an offense under . . . section 641 (relating
to public money, property, or records).”
The question thus arises whether CAFRA’s
amendment to § 981(a)(1)(C) permits the Government to
pursue the forfeiture of property previously not “subject to
forfeiture” but made so by the Act. In United States v. One
“Piper” Aztec, 321 F.3d 355 (3d Cir. 2003), we addressed a
related question with respect to CAFRA’s imposition of the
burden of proof on the Government to prove forfeiture under
18 U.S.C. § 983(c). In that case, our analysis under Landgraf
v. USI Film Products, 511 U.S. 244, 280 (1994), was not
particularly difficult because Congress “clear[ly] and
unambiguous[ly]” set forth the enactment’s temporal scope
by providing a retroactivity clause. 321 F.3d at 358 & n.3.
Specifically, Congress stated that “[CAFRA] and the
amendments by [CAFRA] shall apply to any forfeiture
57
proceeding commenced on or after [August 23, 2000].” Pub.
L. No. 106-185, § 21, 114 Stat. 202, 225 (2000); 8 U.S.C. §
1324 (note). We therefore held that the Government’s
heightened burden applies only in civil forfeitures
“commenced on or after [August, 23, 2000].” 321 F.3d at357–58.
So too here. As illustrated by One “Piper” Aztec,
CAFRA’s retroactivity clause is the beginning and end of the
Landgraf analysis in this case because only one date is
relevant to CAFRA’s applicability: August 23, 2000.19 See
19
CAFRA’s retroactivity clause is also why the
Langbords’ focus on § 641’s year of enactment is inapposite.
In passing CAFRA, Congress was aware that entire swaths of
new property would become subject to forfeiture due to
conduct occurring prior to CAFRA’s effective date, pursuant
to various criminal statutes that were themselves enacted
“some time in the past.” Nonetheless, the legislature did not
single out any these myriad dates of enactment, and instead
tied CAFRA’s application only to the date of its own
enactment.
We are also unpersuaded by the Langbords’ reliance
on United States v. Eleven Vehicles, 836 F. Supp. 1147 (E.D.
Pa. 1993). At issue in that case was a version of 18 U.S.C. §
981(a)(1)(A) that rendered forfeitable “[a]ny property, real or
personal, involved in a transaction or attempted transaction in
violation . . . of section 1956 or 1957 of [title 18], or any
property traceable to such property.” 836 F. Supp. at 1151.
Sections 1956 and 1957 are money laundering statutes that
were enacted in the Money Laundering Control Act of 1986,
Pub. L. No. 99-570, §§ 1352, 1366, 110 Stat. 3207-18, 3207-
35. That statute, unlike CAFRA, did not include a provision
58
321 F.3d at 357–58. For this reason, we hold that CAFRA’s
amendment to § 981(a)(1)(C) applies to property made
forfeitable by conduct occurring prior to the Act.
Accordingly, for predicate offenses already listed in §
1956(c)(7) at the time CAFRA was passed—such as § 641—
we need only look to whether the Government filed its
specifying an effective date, much less a retroactivity clause.
836 F. Supp. at 1156 & n.11; see also Pub. L. No. 99-570, §
1364, 110 Stat. 3207-34–35. Furthermore, § 981(a)(1)(A)
required (and still requires) a “violation” of either § 1956 or
§ 1957. Thus, the court in Eleven Vehicles determined the
statutes’ effective date to be the date of their enactment,
October 27, 1986, and declined to permit retroactive
forfeitures thereunder. In contrast, CAFRA not only includes
a retroactivity clause, but is broadly phrased to permit the
forfeiture of “proceeds traceable to . . . any offense
constituting ‘specified unlawful activity,’” which includes “an
offense under . . . section 641.” 18 U.S.C. §§ 981(a)(1)(C),
1956(c)(7)(D) (emphasis added).
Finally, to the extent that the Langbords’ retroactivity
argument suggests that the Government’s forfeiture action
depends on actions that were not criminal at the time they
were taken, we disagree with their factual premise. As
Morissette makes clear, although § 641 was enacted in 1948,
the statute had “no other purpose . . . than to collect from
scattered sources crimes so kindred as to belong in one
category.” 342 U.S. at 266–67. Thus, the fact that § 641 did
not exist until 1948 does not mean that “embezzl[ing],
steal[ing], or purloin[ing] . . . property of the United States”
was lawful activity prior to that date. Id. at 266 n.28.
59
forfeiture complaint on or after August 23, 2000. Id. With
respect to the ten 1933 Double Eagles at issue in this case, the
Government filed its forfeiture complaint in 2009. App.
1162–82. Thus, “our inquiry is done.” One “Piper” Aztec,
321 F.3d at 358. The District Court’s jury instructions were
proper.
* * *
This case is unique for many reasons. It involves
iconic American gold pieces that apparently had lain dormant
in a safe-deposit box for decades. Almost immediately after
the 1933 Double Eagles surfaced in 2002, the right to possess
and own them was vigorously disputed. The resolution of that
dispute required the District Court to consider novel questions
of constitutional, statutory, and common law. The able trial
judge worked diligently through all of the issues and gave
both sides a fair trial. Once the jury had spoken, the District
Court declared that the 1933 Double Eagles had always been
property of the United States. Although the benefit of
hindsight has convinced us that certain errors were committed
in the conduct of the trial, they did not affect the outcome.
We will affirm the judgment of the District Court.
60
JORDAN, Circuit Judge, concurring in part and concurring in
the judgment:
_________________________________
I agree with the excellent opinion of the Majority in all
but one respect. Like Judge Rendell and those joining her
partial dissent, I cannot join Part IV.A of the Majority
Opinion. I have serious doubts about the Majority’s assertion
that there was no nonjudicial forfeiture proceeding here and,
hence, I also question the conclusion that CAFRA does not
apply. Nothing in CAFRA or, to my knowledge, elsewhere in
the United States Code specifies how a “nonjudicial forfeiture
proceeding” actually begins. Although the government
asserts, and the Majority agrees, that there were no such
proceedings here, the language of CAFRA suggests
otherwise.
Of particular note is 18 U.S.C. § 983(a)(1)(A)(iii).
Under that section, when the government obtains a criminal
indictment with an allegation that the property is subject to
forfeiture before the 60-day period for notice has expired,1 it
has two choices concerning its notice obligation: (1) “send
1
As the Majority lays out, see Majority Op. at 14,
CAFRA provides that the government generally has 60 days
from the date of seizure to send to interested parties written
notice of the seizure and its intent to forfeit the property, at
which point a claimant may file a seized asset claim. See 18
U.S.C. § 983(a)(1)(A); 19 U.S.C. § 1607(a). If a seized asset
claim is filed, the nonjudicial forfeiture cannot proceed, and
the government then has 90 days to file a complaint for
judicial forfeiture or to return the property pending the filing
of a complaint. 18 U.S.C. § 983(a)(3)(A).
1
notice within the 60 days and continue the nonjudicial civil
forfeiture proceeding under this section”; or (2) “terminate
the nonjudicial civil forfeiture proceeding” and use the
criminal forfeiture laws. 18 U.S.C. § 983(a)(1)(A)(iii)
(emphasis added). Both verbs – “continue” and “terminate” –
presuppose that a nonjudicial civil forfeiture proceeding has
already begun, even though no “notice” designated as such
may have been provided. In addition, § 983(e)(1) provides
that “[a]ny person entitled to written notice in any nonjudicial
civil forfeiture proceeding under a civil forfeiture statute who
does not receive such notice may file a motion to set aside a
declaration of forfeiture with respect to that person’s interest
in the property … .” That section similarly assumes the
existence of a nonjudicial forfeiture proceeding, even though
the government has not yet sent something designated as a
“notice” to verify its intent to pursue forfeiture.
That is not to say that no notice is necessary. Some
manifestation of the intent to keep the seized property is
needed. The Code of Federal Regulations provides that an
“administrative forfeiture proceeding”2 commences, as
relevant here, “when the first personal written notice” of the
seizure is sent to interested parties. 28 C.F.R. § 8.8. The
Majority makes the footnoted assertion, at the government’s
urging, that, “although CAFRA does not specify the content
of nonjudicial forfeiture notices, a letter that explicitly
disavows any intent to initiate a forfeiture surely cannot
2
The regulations define an “administrative forfeiture”
as “the process by which property may be forfeited by a
seizing agency rather than through a judicial proceeding,” and
provide that the term “nonjudicial forfeiture” as used in § 983
bears the same meaning. 28 C.F.R. §§ 8.2, 9.2.
2
suffice.” (Majority Op. at 17 n.5.) I disagree. In my view,
the simple omission of the word “forfeiture” from the
government’s notice – when that notice did in fact assert the
functional equivalent of a forfeiture – does not avoid the
deadlines and protections of CAFRA. When (as here) the
government seizes property, asserts its title, and tells the
previous owner that it will never return the property, that
should surely suffice to trigger a “nonjudicial forfeiture
proceeding.”3
It is noteworthy that, in teaching Department of Justice
attorneys the proper contours of forfeiture policy, the 2016
Department of Justice Asset Forfeiture Policy Manual
cautions its attorneys not to use formalistic distinctions to try
to bypass CAFRA’s statutory deadlines. That manual
provides that, even though CAFRA’s 90-day deadline may
not apply to property subject only to judicial forfeiture, in a
case involving such seized property, “the prosecutor should
treat [a seized asset claim] as if it were a ‘claim’ referred to in
section 983(a)(3)(A) …, and should thus commence a judicial
forfeiture action within 90 days of the receipt of the request.”
Department of Justice Asset Forfeiture and Money
Laundering Section, Asset Forfeiture Policy Manual at 58
(2016), available at https://www.justice.gov/criminal-afmls/
3
Further, the government’s claim that it did not need
to engage in a forfeiture proceeding because the Double
Eagles were its own property is a logical box that I, like the
Majority, will decline to step into. (See Majority Op. at 13
n.3.) That dubious position both assumes the truth of the
government’s allegation without any requirement of proof
and gives the government the power to unilaterally define
when there is and is not a forfeiture.
3
file/839521/download. The Manual establishes that deadline
for judicial forfeiture because,
[i]f the Government were to seize property for
forfeiture in a situation where administrative
forfeiture was authorized, but then ignore the
60- and 90-day deadlines in sections 983(a)(1)
and (3) on the ground that it intended all along
to skip over the administrative forfeiture
process and proceed directly with a judicial
forfeiture, courts might suspect that the
Government was actually conjuring an ad hoc
excuse for missing the statutory deadlines, or
had decided to bypass the administrative
forfeiture proceeding for the express purpose of
circumventing the statutory deadlines and the
underlying congressional intent.
Id. at 57. That is an insight worth mulling over.
The Majority’s careful distinction between a “seizure”
and a “forfeiture” – that the former transfers possession while
the latter transfers title – is certainly correct. (Majority Op. at
18-19.) But a seizure will often be a component of a
forfeiture. And that distinction is of limited utility here,
because when the government seized the disputed coins it
simultaneously asserted that it had no intention to seek
forfeiture since it already had title. In other words, the
government took possession and, in doing so, asserted title. It
is difficult to square the Majority’s distinction between
seizure and forfeiture on this record, when the government
took the coins and said that it had both possession and title.
Under these circumstances, the government’s claim of
4
ownership and the manifestation of its intent to retain
indefinite possession of the coins was, in my view, sufficient
to initiate a nonjudicial forfeiture proceeding.
All of this accords with common sense because, in the
absence of some clear description of what a notice must
contain or how a nonjudicial forfeiture proceeding starts, the
reasonable default conclusion is that it begins when the
government takes your property and refuses to ever give it
back – in short, when there is a seizure accompanied by some
manifestation of an intent to claim ownership. I thus am
inclined to agree with Judge Rendell that, when CAFRA
speaks of a “nonjudicial forfeiture proceeding,” it is not
referencing some formal administrative action with the
trappings of a quasi-judicial proceeding. The statute is using
that phrase as a shorthand recognition that law enforcement
agencies can and do leave the courts out of the process of
taking and keeping property when it appears that no one else
is claiming an interest in the property. As the Majority itself
recognizes, “[n]onjudicial forfeitures ... ‘permit[] the United
States to determine whether property in its custody is
unclaimed, and, if it is, to take ownership without the trouble
and expense of court proceedings.’” (Majority Op. at 15 n.4
(quoting Small v. United States, 136 F.3d 1334, 1335 (D.C.
Cir. 1998)). I thus do not accept the premise advanced by the
Majority that, for there to have been a “nonjudicial civil
forfeiture proceeding” in this case, there needed to be some
government action beyond the seizure of the Double Eagles
and the stated intent to retain possession and ownership of
them.4
4
This case presents the circumstance of the
government both taking possession and asserting ownership,
5
The oddity of the government’s decision to initially
forgo any approach to a court in this case is that it was
apparent from the outset there were claimants to the property
in question. Laying claim to the Double Eagles without going
to court was thus a bad idea from the start. Most every
government agency involved here – the U.S. Attorney’s
Office for the District of Columbia, the Secret Service, and
the Department of the Treasury – seemed to share that view.
Every agency except one: the Mint. A nonjudicial approach
to resolving the dispute over ownership should not have been
the option chosen by the government, and, indeed, the District
Court determined that the government’s actions here violated
the Langbords’ constitutional rights, concluding “that the
Government’s belief that the coins had been stolen did not
diminish [the Langbord’s] Fourth Amendment rights and did
not change the nature of the Government’s seizure.” (App.
153.) That conclusion has not been challenged on appeal and
it is supported by the record. The District Court then faced
the difficult decision of determining how to remedy the
constitutional violation while giving both the Langbords and
the government the day in court that should have been sought
in the first instance. The Court’s decision requiring the
government to “promptly initiate a forfeiture action” may or
may not have been appropriate under the circumstances, but
the government’s handling of the dispute was clearly ill-
advised. (App. 157.) The safe and sensible choice would
have been to comply with CAFRA.
which makes the outcome all the clearer to me. But if the
government had simply said “we’ve got the coins and we’re
keeping them,” without reference to ownership or title, I do
not think that would be any less a forfeiture.
6
That reasoning leads me also to reject the Majority’s
characterization of the Langbords’ decision to file a seized
asset claim as being “incongruous[].” (Majority Op. at 17.)
A seized asset claim certainly sounds like the right way to
claim assets that the government has seized, so there was
nothing incongruous about that step. Nor am I persuaded by
the Majority’s assertion that the Langbords’ “seized asset
claim was akin to filing a petition for writ of habeas corpus
on behalf of someone not in custody – mismatched and
ineffective.” (Majority Op. at 18.) To borrow the metaphor,
it seems to me instead that the situation is more like one in
which the government is keeping a habeas claimant locked in
a 6’ by 9’ room while insisting that he is not really in custody.
Just because the government says a person is not in custody
does not make it so. Likewise, the government took custody
of the Double Eagles and would not return them, so its
assertion that what was happening was not a forfeiture of
whatever right the Langbords might have had does not make
that assertion true. I would not go as far as Judge Rendell in
faulting the government for “audacity” (Dissent Op. at 1), but
I do believe we have allowed ourselves to be caught in a
semantic game in this case. Labeled a “forfeiture” or not,
what matters is what happened: the government took the
property, claimed ownership, and kept it; the Langbords
wanted it back. Resolving disputes like that is what forfeiture
proceedings are for. A good argument can be made, and
Judge Rendell has made it, that Congress meant for CAFRA
to be the first option that the government and claimants turn
to when fighting over who gets to keep disputed property.
But the strict deadlines in CAFRA do not always apply
and we have reason to question whether they do here. The
7
reason for doubt is not because the government says, “these
are ours; you stole them.” CAFRA specifically contemplates
property stolen from the government as being subject to
CAFRA’s regime. See 18 U.S.C. § 981(a)(1)(C) (stating that
property “subject to forfeiture” includes the proceeds of
“specified unlawful activity” defined in 18 U.S.C.
§ 1956(c)(7), which includes the offense of theft of
government property under 18 U.S.C. § 641). The reason that
the CAFRA deadlines may not apply is, instead, as noted by
Judge Rendell, that the Double Eagles may be merchandise
valued at over $500,000, instead of being monetary
instruments, so they may be statutorily ineligible for
nonjudicial forfeiture. See 19 U.S.C. § 1607(a); Dissent Op.
at 8-10.
No court has yet addressed that question, and it is an
interesting one, but, unlike the dissenters, I do not see a need
to remand the case for an answer. The unusual facts here
provide an alternative basis for affirming the judgment of the
District Court. As the Majority notes, the government
pursued a proper declaratory judgment action to quiet title to
the Double Eagles “in addition to the court-ordered judicial
forfeiture proceeding.” (Majority Op. at 24 (original
emphasis).) The government did so under a legal theory
independent of its forfeiture claim, “namely, that the
Government was attempting to regain possession of what it
believed to be its own property.” (Id.) Because, in these
particular circumstances, the District Court was within its
discretion in allowing the government to file a declaratory
judgment action in addition to (and not in lieu of) the judicial
8
forfeiture proceeding,5 there is no need for us to assess the
propriety of the forfeiture action itself. Even if the
government violated CAFRA, the fact that the disputed
property (allegedly) belonged to it all along allowed it to seek
a separate declaratory judgment in its capacity as the
property’s purported rightful owner. Given the unusual
procedural and factual background of this case, any errors in
the forfeiture proceeding did not infect the distinct
declaratory judgment action. That is all we need to say, and
judicial restraint counsels that we go no further. Cf. PDK
Labs, Inc. v. Drug Enf’t Admin., 362 F.3d 786, 799 (D.C. Cir.
2004) (“[I]f it is not necessary to decide more, it is necessary
not to decide more.”) (Roberts, J., concurring in part and
concurring in judgment).
In short, because a separate action to quiet title was
permissible in this unusual context, we need not venture into
the CAFRA thicket. I emphasize, however, that my
agreement that there is an independent and adequate basis on
which to affirm here should not be taken as an endorsement
of the government’s ignoring the statutorily provided
mechanisms for forfeiture. The approach taken by the Mint is
one that ought not be repeated.
I concur in the balance of the Majority’s opinion and
in its judgment.
5
I fully agree with Part IV.B.3 of the Majority’s
opinion, which explains why “the District Court committed
no error when it allowed the Government to amend its
counterclaim” to add the declaratory judgment claim.
(Majority Op. at 29.)
9
RENDELL, Circuit Judge, dissenting with whom McKEE,
Chief Judge and KRAUSE Circuit Judge join:
I respectfully dissent from Part IV.A of the majority’s
opinion. The majority’s reasoning as to why CAFRA’s
nonjudicial forfeiture provisions do not apply here is at best
cryptic and, at worst, sets an incorrect and dangerous
precedent that would allow the Government to nullify
CAFRA’s provisions at will. In effect, the majority holds that
the Government did not commence a nonjudicial forfeiture
proceeding, and thus avoided the dictates of CAFRA, based
mainly on its buy-in to the Government’s audacity—the
Government’s say-so that it owned the 1933 Double Eagles
and had no intention of forfeiting them. But in reaching this
unprecedented result, the majority not only disregards how
CAFRA works and what actually happened here, but also
renders CAFRA’s protections largely meaningless and defies
Congress’s intent in passing the statute.
I.
This case involves precisely the type of situation that
CAFRA was enacted to prevent: the Government’s seizing
and taking ownership of property in derogation of the rights
of ordinary citizens. Indeed, Congress passed CAFRA to
“level[] the playing field between the government and
persons whose property has been seized.” United States v.
Real Prop. in Section 9, 241 F.3d 796, 799 (6th Cir. 2001).
To that end, CAFRA imposes deadlines on the Government
for commencing a nonjudicial forfeiture proceeding of seized
property and for filing a judicial forfeiture action in response
to a citizen’s timely claim to that property—not to mention
deterrent penalties for missing those deadlines.
1
A nonjudicial forfeiture proceeding under CAFRA is
not a “proceeding” in the true sense of the word, but, rather, a
statutory scheme. That scheme is commenced when the
Government seizes property and notifies all interested parties
within “60 days . . . of the seizure,” 18 U.S.C. §
983(a)(1)(A)(i), that it intends to keep the property as its own
“without the trouble and expense of court proceedings,” Small
v. United States, 136 F.3d 1334, 1335 (D.C. Cir. 1998). If no
one submits a timely claim to the property in response
(known as a “seized asset claim”), the Government can issue
a “declaration of forfeiture . . . [that has] the same force and
effect as a final decree and order of forfeiture in a judicial
forfeiture proceeding in a district court of the United States.”
19 U.S.C. § 1609(b). But if someone asserts a timely seized
asset claim, the nonjudicial forfeiture proceeding ceases, and
the Government has 90 days to file a judicial forfeiture action,
18 U.S.C. § 983(a)(3)(A), in which it then bears the burden of
proving its right to the property, id. § 983(c)(1). If the
Government does not file a timely action, though, it must
“promptly release the property . . . and may not take any
further action to effect the civil forfeiture of such property in
connection with the underlying offense.” Id. § 983(a)(3)(B).1
1
The cases cited by the majority, though not decided
under CAFRA, confirm that the nonjudicial forfeiture scheme
generally operates this way. See, e.g., Taylor v. United States,
483 F.3d 385, 387–88 (5th Cir. 2007); United States v.
Miscellaneous Firearms, 376 F.3d 709, 711 (7th Cir. 2004);
United States v. Dusenbery, 201 F.3d 763, 765–66 (6th Cir.
2000); Boero v. DEA, 111 F.3d 301, 304 (2d Cir. 1997);
Floyd v. United States, 860 F.2d 999, 1008 (10th Cir. 1988).
2
The majority ignores how CAFRA’s scheme applies
here—notwithstanding that the events fit within it in lockstep.
The Government seized the 1933 Double Eagles when it
failed to honor the Langbords’ July 25, 2005, letter requesting
their return and instead “decided to keep [them] for [its] own
purposes.” Langbord v. U.S. Dep’t of Treasury, 645 F. Supp.
2d 381, 392 (E.D. Pa. 2009). Next, on August 9, 2005, within
60 days of seizing the 1933 Double Eagles, see 18 U.S.C. §
983(a)(1)(A)(i), the Government sent a letter to the
Langbords notifying them that it intended to keep these
items—without a court proceeding—because they allegedly
“already are, and always have been, property belonging to the
United States.” App. 823.2 To be sure, in this letter the
Government disclaimed any intent to forfeit the 1933 Double
Eagles. See id. But this statement alone cannot preclude the
letter from constituting notice of the Government’s intent to
nonjudically forfeit them. See 18 U.S.C. § 983(a)(1)(A)(i)
(requiring only that “notice shall be sent in a manner to
achieve proper notice”); Stefan D. Cassella, Asset Forfeiture
Law in the United States 173 (2d ed. 2013) (“Section
983(a)(1)(A)(i) is silent as to the content of the notice.”). And
2
It is indisputable that allegedly stolen Government
property is subject to forfeiture. See 18 U.S.C. § 981(a)(1)(C)
(property is subject to forfeiture if it “constitutes or is derived
from proceeds traceable to . . . any offense constituting
‘specified unlawful activity’ (as defined in section 1956(c)(7)
of this title)”); id. § 1956(c)(7)(D) (“[S]pecified unlawful
activity” includes “an offense under . . . section 641 (relating
to public money, property, or records)”); id. § 641
(criminalizing the theft or embezzlement of any “thing of
value of the United States or of any department or agency
thereof”).
3
in response to this notice, the Langbords filed a timely claim,
terminating the nonjudicial forfeiture proceeding and
triggering the Government’s obligation to file a judicial
forfeiture action within 90 days and prove its right to the 1933
Double Eagles. But it did not.3
The majority concludes that the Langbords failed to
trigger the 90-day deadline with their seized asset claim
because the Government chose not to initiate forfeiture
proceedings against the 1933 Double Eagles. It reasons that
“the Government determined that it was not obliged to initiate
forfeiture proceedings against the 1933 Double Eagles
because it had merely repossessed its own property” and “[i]n
3
Consider what would have happened if the
Langbords had not filed a timely seized asset claim but had
filed a replevin action a few months after the Government’s
notice. Despite the Mint’s stated position that it was not
seeking forfeiture, is there any doubt that it would have
argued that the Langbords were barred under CAFRA from
claiming the 1933 Double Eagles because they had been
nonjudicially forfeited due to the Langbords’ failure to file a
timely seized asset claim? The Government cannot have it
both ways.
Indeed, I suggest that the Mint’s statement that it did
not intend to pursue forfeiture proceedings meant that it did
not intend to file an unprompted judicial forfeiture complaint.
Every agency involved in this saga other than the Mint
advised the Mint that it should bring a judicial forfeiture
action from the outset. See App. 818. Yet the Mint decided
not to do so and instead commenced a nonjudicial forfeiture
proceeding by notifying the Langbords that it intended to
keep the 1933 Double Eagles without any court proceeding.
4
fact . . . explicitly disclaimed any intent to forfeit the[m].”
Majority Op. 16. Instead, the majority notes, “the
Government asserted its ownership rights to the coins.” Id.
17. It thus holds that the Government never took any steps to
commence a nonjudicial forfeiture proceeding against the
1933 Double Eagles, and so the Langbords’ seized asset
claim was “mismatched” and “ineffective,” likening it to the
filing of a writ of habeas corpus on behalf of someone not in
custody. Id. 18.4
But that approach enables the Government to nullify
all of CAFRA’s protections merely by asserting its ownership
of property and lack of intent to forfeit that property.
Congress cannot have intended this result. See Civil Asset
Forfeiture Reform Act of 2000, Pub. L. No. 106-185, 114
Stat. 202 pmbl. (CAFRA’s purpose is “[t]o provide a more
just and uniform procedure for Federal civil forfeitures”);
United States v. Khan, 497 F.3d 204, 208 (2d Cir. 2007)
(Congress passed CAFRA “to deter government
overreaching”); United States v. Martin, 460 F. Supp. 2d 669,
672 (D. Md. 2006) (“CAFRA was enacted in 2000 to curb
what Congress perceived as abuses of the existing civil
forfeiture system.”). Rather, to stay true to Congress’s intent,
we must focus on what actually occurred here: the
Government seized property that is, by statute, subject to
4
The majority’s second line of reasoning relies on two
cases, Mantilla v. United States, 302 F.3d 182 (3d Cir. 2002),
and United States v. $8,221,877.16 in U.S. Currency, 330
F.3d 141 (3d Cir. 2003). These non-CAFRA cases support the
unremarkable proposition that a seizure does not necessarily
commence a forfeiture proceeding, and they do not determine
the outcome of this case.
5
forfeiture, see supra note 2, with the intent to keep that
property permanently and without a court proceeding, and so
notified the Langbords. Clearly, then, a nonjudicial forfeiture
proceeding was in process before the Langbords filed their
seized asset claim, which should have triggered the filing of a
judicial forfeiture complaint by the Government within 90
days, see 18 U.S.C. § 983(a)(3)(A).5
Accordingly, because the Government’s failure to file
a judicial forfeiture action within 90 days of the Langbords’
5
The Government’s claim that the 1933 Double
Eagles belong to the United States, after all, is just that, and
the validity of that claim is the very question to be answered
by a forfeiture proceeding, not by the Government’s say-so.
That CAFRA expressly provides for an “innocent owner
defense,” see 18 U.S.C. § 983(d)(1) (providing that “[a]n
innocent owner’s interest in property shall not be forfeited
under any civil forfeiture statute”), drives home that where
there is any colorable claim of a legitimate property interest
by the claimant-possessor, the validity of the asserted interest
needs to be determined through a forfeiture proceeding.
Allowing the Government’s self-declaration of its own
property interest to be conclusive puts the forfeiture cart
before the horse. Were it otherwise, the Government might
well assert that its pre-existing title to seized property enables
it to avoid CAFRA in any number of situations. See, e.g., id.§ 981(f) (“All right, title, and interest in property described in
subsection (a) of this section [i.e., forfeitable property] shall
vest in the United States upon commission of the act giving
rise to forfeiture under this section.”); but cf. United States v.
92 Buena Vista Ave., 507 U.S. 111, 124–29 (1993) (plurality
opinion) (explaining that an identical provision in 21 U.S.C. §
881(h) does not confer title until forfeiture has been decreed).
6
timely seized asset claim barred it as a matter of law from
taking any further action to forfeit the 1933 Double Eagles,
see 18 U.S.C. § 983(a)(3)(B), the District Court erred in
permitting the Government to later file its declaratory
judgment and judicial forfeiture actions.6 Instead, the District
Court should have ordered the 1933 Double Eagles returned
to the Langbords pursuant to the statutory directive. I would
therefore reverse the District Court’s order.
6
I respectfully disagree with Judge Jordan’s view in
his concurrence that, even if the Government violated
CAFRA’s 90-day deadline, it was still permitted to bring its
declaratory judgment action seeking to quiet title to the 1933
Double Eagles. He and the majority justify the Government’s
declaratory judgment action because it was purportedly based
on a legal theory independent of the forfeiture claim. At
bottom, though, in both claims, the Government sought to
quiet title to the 1933 Double Eagles. See United States v.
McHan, 345 F.3d 262, 275 (4th Cir. 2003) (“[T]he purpose of
a quiet title action is to determine which named party has
superior claim to a certain piece of property.” (internal
quotation marks omitted)). The forfeiture claim and
declaratory judgment action were thus “essentially predicated
upon the same cause of action,” Algrant v. Evergreen Valley
Nurseries Ltd. P’ship, 126 F.3d 178, 185 (3d Cir. 1997), and
because the Government was not permitted to “take any
further action to effect the civil forfeiture of such property,”
18 U.S.C. § 983(a)(3)(B) (emphasis added), as a matter of
law it was not allowed to circumvent CAFRA’s 90-day
deadline “by ‘[d]raping [its] claim in the raiment of the
Declaratory Judgment Act,’” Algrant, 126 F.3d at 185(quoting Gilbert v. City of Cambridge, 932 F.2d 51, 58 (1st
Cir. 1991)).
7
II.
But we must address another issue as to the
applicability of CAFRA’s nonjudicial forfeiture provisions
here. Even though the Government’s seizure and notice
usually commence the nonjudicial forfeiture scheme, some
property is ineligible for nonjudicial forfeiture. The
Government has urged that the 1933 Double Eagles are
ineligible for nonjudicial forfeiture because they are
“merchandise” whose value “exceed[s] $500,000” and not
“monetary instrument[s].” 19 U.S.C. § 1607(a); id. § 1610. If
that is true, the Langbords’ seized asset claim would have
been ineffective to trigger the 90-day deadline. See 18 U.S.C.
§ 983(a)(2)(A) (claim can be filed only by a “person claiming
property seized in a nonjudicial civil forfeiture proceeding”).
And, thus, the judicial forfeiture initiated by the Government
in 2009 would have been timely because § 983(a)(3)(A) did
not apply.
This issue should give us pause. The definition of
“monetary instruments” includes, among other things,
“United States coins and currency,” “travelers’ checks,” and
“bearer securities.” 31 U.S.C. § 5312(a)(3). Did Congress
intend that “monetary instrument” should encompass only
currency in circulation and liquid assets that constitute
substitutes for currency? See H.R. Rep. No. 91-975, at 22
(1970) (discussing a statute requiring domestic financial
institutions to report certain transactions involving “monetary
instruments” and stating that “[i]t is not the intention of your
committee . . . that [monetary instruments] be expanded any
further than necessary to cover those types of bearer
instruments which may substitute for currency”). On the other
8
hand, the 1933 Double Eagles are rare, uncirculated coins
whose seemingly immense value derives from their status as
collector’s items. Viewed in this way, they would be not
monetary instruments but, instead, merchandise possibly
worth over $500,000, which is ineligible for nonjudicial
forfeiture.
This is a threshold issue that must be decided—one
that cuts to the very applicability of CAFRA’s nonjudicial
forfeiture scheme.7 Nevertheless, although it was presented to
the District Court, it was never addressed there, let alone
decided. We should therefore remand to the District Court for
it to make the initial ruling on this issue.8
Thus, I urge that CAFRA’s nonjudicial forfeiture
scheme was set in motion here and would require that the
1933 Double Eagles be returned to the Langbords under 18
U.S.C. § 983(a)(3)(B). But that result should follow only if
the District Court decides that CAFRA’s nonjudicial
forfeiture scheme even applied to them. I suggest that remand
7
See, e.g., In re Funds on Deposit, 919 F. Supp. 2d
169, 174–75 (D. Mass. 2012) (holding that CAFRA’s
nonjudicial forfeiture scheme did not apply because the
Government seized property that was ineligible for
nonjudicial forfeiture under 19 U.S.C. §§ 1607(a) and 1610).
8
The District Court would decide (1) whether the 1933
Double Eagles are merchandise or U.S. coins and currency;
and (2) if merchandise, whether they are in fact worth over
$500,000. While there is evidence in the record suggesting
this valuation, it was never an issue that was vetted or decided
in the District Court.
9
is the appropriate disposition in the first instance and,
therefore, respectfully dissent.
10