United States v. Christopher Hester ( 2023 )

United States Court of Appeals
For the Eighth Circuit
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No. 22-3007
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United States of America
Plaintiff - Appellee
v.
$34,918 United States Currency
Defendant
Christopher Hester
Claimant - Appellant
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Appeal from United States District Court
for the Western District of Arkansas - Ft. Smith
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Submitted: April 13, 2023
Filed: June 13, 2023
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Before BENTON, GRASZ, and STRAS, Circuit Judges.
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BENTON, Circuit Judge.
Christopher William Hester claimed $34,918 found in his car during a traffic
stop. When he failed to fully respond to the government’s special interrogatories,
the district court sanctioned him by striking his claim and entering a default
judgment forfeiting the money to the government. Hester appeals, arguing that the
district court relied on an incorrect interpretation of Rule G(8). Having jurisdiction
under 28 U.S.C. § 1291, this court reverses and remands.
I.
On November 2, 2021, police stopped a car for a traffic violation. Hester was
driving. The passenger, Antonio Burris, had a backpack at his feet. Smelling
marijuana, police searched the car, finding a few marijuana cigarettes, two empty
suitcases, and $34,918 in cash vacuum-sealed and plastic-wrapped inside the
backpack.
Hester and Burris claimed they had pooled their money for a trip to Las Vegas,
where they planned to gamble, shop, and bring back winnings in the empty suitcases.
The government thought the money was drug-related. The Drug Enforcement
Administration sought forfeiture of the cash under 21 U.S.C. § 881(a)(6).
Hester claimed ownership of the money, filing a verified answer under
Supplemental Rule G of the Supplemental Rules for Admiralty or Maritime Claims
and Asset Forfeiture Actions, which governs forfeiture actions in rem and establishes
procedures for claiming defendant property. 1 See Fed. R. Civ. P. Supp. R. G.
Three provisions are relevant: First, Rule G(5) describes filing a claim. Supp.
R. G(5). This “low threshold” is “a bare-bones requirement to ‘state the claimant’s
interest in the property.’” United States v. $579,475.00 in U.S. Currency, 917 F.3d
1047, 1049 (8th Cir. 2019) (en banc), quoting Supp. R. G(5). Second, Rule G(6)
allows the government to “serve special interrogatories . . . to test the claimant’s
relationship to the property.” Id., citing Supp. R. G(6). Finally, Rule G(8)
authorizes motions to strike a claim “for failing to comply with Rule G(5) or (6).”
Supp. R. G(8)(c)(i)(A).
1
Burris did not file a claim.
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Hester filed a claim under Rule G(5). The government served 17 special
interrogatories under Rule G(6). Hester responded, but just barely. He answered
three days past the deadline, objected to 9 of the 17 interrogatories, provided
incomplete responses to four, and failed entirely to respond to one. He did not even
sign and swear to his answers.
The parties began a back-and-forth. Hester promised to supplement all but
one of his (admittedly insufficient) responses. The government agreed to drop the
one objectionable interrogatory and allow 15 days to supplement the rest. Hester
supplemented his responses, verified the document, and attached financial records,
but he also gave terse and incomplete answers.2
The government, still unsatisfied, identified deficiencies and threatened a
motion to strike if Hester failed to fully supplement. Hester responded with some
2
For example, Hester simply responded “Virginia” to an interrogatory asking
him to “[i]dentify the states, provinces and foreign countries in which you have
obtained a driver’s license, driving permit, or state identification, including, where
applicable, the license, permit, or identification number, and state whether the
license, permit, or identification is currently valid.”
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additional information, 3 some objections, 4 and much agitation.5 He again neglected
to verify.
The government moved to strike Hester’s claim as a sanction for failing to
fully answer the special interrogatories. See Supp R. G(6), (8). It alternatively
requested an order that Hester answer certain interrogatories. Hester’s response to
the motion had three parts: First, he provided more complete answers to the
interrogatories, including new details about his withdrawals; an affidavit from his
girlfriend saying she had gifted him part of the cash; and new annotations on the
previously disclosed bank documents. Second, he argued that his responses
sufficiently established standing. Finally, he asked that, if the court found his
responses insufficient, it compel him to answer whatever interrogatories needed
supplementing.
3
He informed the government, for example, that his girlfriend has the “Same
Address as Christopher Hester.”
4
In response to the government’s claim that his attached bank documents fell
short of the special interrogatory request to provide “records, documents, or tangible
items that document or relate in any way to your [claim] . . . , including the name,
address, telephone number and email address of its custodian,” Hester objected that
“Special Interrogatories are not standard discovery. The information provided
shows where the money comes from, where the money was transferred and sent to
Mr. Hester. The relationship with the money has been firmly established. No other
information will be provided.”
5
Informed that he provided insufficient information about his driver’s license,
Hester said: “Please contact Virginia Department of Motor Vehicles to find out if
the license is valid, further whether the license if [sic] valid has nothing to do with
identifying Mr. Hester, as special interrogatories are only to be used to identify the
claimant and their relationship to the property and nothing else. As for the license
number, you have this information already on the ticket where Mr. Hester was pulled
over, but since you can’t read the information that you already have: [LICENSE NO.
REDACTED].”
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The district court found Hester’s interrogatory responses insufficient and,
rather than compel responses, struck his claim as a sanction for failing to fully
respond. See Supp R. G(8). It found that Hester had violated Rule G(6), and that
even Hester’s more detailed responses to the motion to strike were “either
incomplete or raise significant questions about his standing.” (quotation omitted).
It declined to order Hester to supplement because, the court explained, three months
had passed since Hester received the special interrogatories and he had not identified
the specific obstacles preventing him from producing financial records. Hester
appeals, arguing that the district court abused its discretion by striking his claim, and
that he had established standing.
II.
This court generally reviews the district court’s decision to strike a claim for
abuse of discretion. See United States v. One Parcel of Prop. Located at RR 2,
Indep., Buchanan Cnty., 959 F.2d 101, 104 (8th Cir. 1992). When a district court
bases its decision on an interpretation of the Supplemental Rules, this court reviews
that interpretation de novo. United States v. Real Props. Located at 7215 Longboat
Drive (Lot 24), 750 F.3d 968, 972 (8th Cir. 2014). See also Koon v. United States,
518 U.S. 81, 100 (1996) (“A district court by definition abuses its discretion when it
makes an error of law.”).
The district court struck Hester’s claim under Rule G(8), which permits
motions to strike a claim for “failing to comply with” Rule G(6), the special-
interrogatory rule. Hester argues that Rule G(8) did not authorize striking his claim
because he did not “fail[] to comply” with the special interrogatories.
In determining what constitutes “failing to comply” with special
interrogatories, this court relies first and foremost on the Rule’s plain meaning.
$579,475, 917 F.3d at 1049, citing Pavelic & LeFlore v. Marvel Entm’t Grp., 493
U.S. 120, 123 (1989).
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“Failing to comply” with an obligation requires actual or constructive
awareness of it. “Compliance” presupposes a “requirement” or “direction.”
Compliance, Merriam-Webster’s Dictionary, https://www.merriam-webster.com
(last visited May 30, 2023); Compliance, Oxford English Dictionary (3d ed. 2009),
https://www.oed.com (last visited May 30, 2023). A boss has not “required” or
“directed” a subordinate to do something by typing up an email and forgetting to hit
“send.” It makes no sense to criticize the subordinate for “failing to comply” with
the boss’s unsent email when the subordinate neither read it (actual knowledge) nor
could have read it (constructive). The term “failure to comply” simply does not fit.
Another example: a driver fails to comply with a stop sign after overlooking or
ignoring it, but not after a vandal removes the sign and the driver has no idea it
existed.
An individual cannot “fail to comply” with an unknowable obligation. A
party fails to comply with discovery obligations after a court order defines those
obligations. See Aziz v. Wright, 34 F.3d 587, 589 (8th Cir. 1994). Even without a
court order, a loan servicer fails to comply with statutory obligations when their
scope—and their applicability to the loan servicer—is obvious and should be
understood. See Wirtz v. Specialized Loan Servicing, LLC, 886 F.3d 713, 718 (8th
Cir. 2018). But a citizen does not fail to comply with a police order—does not even
have an “opportunity to comply”—when the official does not identify himself and
the citizen is “unaware of a police presence.” Atkinson v. City of Mtn. View, 709
F.3d 1201, 1210 (8th Cir. 2013).
Thus, Rule G(8) authorizes striking a claim for “failing to comply with” Rule
G(6) only if the claimant has reason to know of, and violates, Rule G(6) special-
interrogatory obligations.
Often, this bar is easily met. Rule G(6) imposes non-ambiguous obligations
to answer or object to special interrogatories about “the claimant’s identity and
relationship to the defendant property.” Supp. R. G(6)(a). See Supp R. G(6)(b).
A claimant’s total failure to respond to special interrogatories, for example,
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obviously runs afoul of Rule G(6). See, e.g., United States v. 2008 33’ Contender
Model Tournament Vessel, 990 F.3d 725, 726 (1st Cir. 2021); United States v. Real
Prop. Located at 17 Coon Creek Rd., Hawkins Bar California, Trinity Cnty., 787
F.3d 968, 971 (9th Cir. 2015). Often, the district court need not hesitate to strike a
claim under Rule G(8).
Sometimes Rule G(6)’s obligations are harder to understand. If a special
interrogatory is arguably beyond the scope of Rule G(6), does objecting to it rather
than answering it constitute “failing to comply” with the Rule? On the one hand,
Rule G(6) explicitly authorizes “objections to [the] special interrogatories.” Supp.
R. G(6)(b) (“Answers or Objections. Answers or objections to these interrogatories
must be served within 21 days after the interrogatories are served.”). On the other,
if a special interrogatory is appropriate, a claimant cannot avoid answering it merely
by objecting.
If a claimant’s special-interrogatory objections straddle the line between
discovery dispute and “failing to comply,” the record should indicate that Rule G(6)
violations were known or should have been known by the claimant before the claim
is struck under Rule G(8). The district court can explicitly make this finding. Or, if
a court order has compelled responses, the claimant will have actual knowledge of
the Rule’s scope.
On this record, this court cannot conclude that Hester knew or should have
known that Rule G(6) obligated him to provide more information than he had
provided. Hester articulated a facially reasonable belief that the bank records and
check receipts he supplied “firmly established” his relationship to the cash by
“show[ing] where the money comes from, [and] where the money was transferred
and sent.” He claimed that additional documents requested by the government
exceeded the scope of Rule G(6). Nothing in the record indicates that Hester had
actual or constructive knowledge of additional obligations—the district court neither
found that he should have known he was violating the Rule, nor issued an order
compelling him to respond to interrogatories. Without either a finding of knowing
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non-compliance or a district court order, this court cannot conclude that Hester’s
responses were properly struck under Rule G(8) for “failing to comply with” Rule
G(6).
Requiring either knowing noncompliance or a court order reflects existing
practice, as exemplified by cases like United States v. $284,950.00 in U.S. Currency,
933 F.3d 971 (8th Cir. 2019). In $284,950, this court affirmed dismissal of a claim
after the district court had ordered the claimant to “supplement his responses to the
special interrogatories as requested by the United States.” Id. at 973. The
government moved to strike under Rule G(8) after the claimant provided incomplete
responses and refused to supplement. Rather than immediately dismiss the claim,
the district court ordered compliance with the government’s special interrogatory
requests. When the claimant then “failed to verify” his answers, “failed to
supplement” his responses, and “failed to identify relevant documents” to
substantiate his claim, the district court struck his claim, and this court affirmed. Id.at 974–75. See also United States v. Real Prop. Located at 17 Coon Creek Rd.,
Hawkins Bar California, Trinity Cnty., 787 F.3d 968, 973 (9th Cir. 2015) (“[C]ourts
typically afford claimants one or even several opportunities to cure defective Rule
G(6) responses.”).
The district court here correctly noted “striking” similarities between Hester’s
responses and the claimant’s responses in $284,950. But it omitted the key
difference: Hester might have believed himself engaged in a standard discovery
dispute. The $284,950 claimant, due to the court order, knew he was not.
Supplemental Rule G’s advisory committee notes support the requirement
that, before striking a claim under Rule G(8), a district court either find a knowing
violation of Rule G(6) or issue an order compelling answers. See Fed. R. Civ. P.
Supp. R. G Advisory Committee’s Notes to 2006 Adoption. They instruct that
Rule G(8) is “somewhat more demanding” of claimants than Rule 37, which permits
striking a claim “where there is [1] an order compelling discovery, [2] a willful
violation of the order, and [3] prejudice to the other party.” United States v.
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$11,3071,188.64 in United States Currency, 825 F.3d 365, 369 (8th Cir. 2016)
(alterations added), citing Fed. R. Civ. P. 37. Requiring either a knowing violation
or a court order is more demanding of claimants than Rule 37’s three-part test.6
The government argues that, because the special interrogatories help
determine a claimant’s standing, district courts require wide latitude to strike claims
under Rule G(8). It cites $579,475, where this court, en banc, pointed to Rule G(8)’s
strictures in dismissing fears that Rule G(5)’s “low threshold” for stating a claim
would encourage meritless claims. $579,475, 917 F.3d at 1049.
The government’s argument is inconsistent with Rule G(8)’s “failing to
comply” requirement. See id. (“[C]ourts are not licensed to impose heightened
pleading requirements in certain classes of cases simply to avoid the risk that
unsubstantiated claims will burden the courts and opposing parties.” (citing
Swierkiewicz v. Sorema N.A., 534 U.S. 506, 512, 514–15 (2002)). In any case,
requiring a court order or a finding of knowing noncompliance in cases where the
claimant raises a reasonable objection to the scope of specific interrogatories aligns
with current practice. See $284,950, 933 F.3d at 973; 17 Coon Creek Rd., 787 F.3d
at 973.
The district court did not find that Hester had actual or constructive knowledge
of his obligation to further supplement, nor did it issue a discovery order that would
have put him on notice. The record thus contains insufficient evidence that Hester
“fail[ed] to comply” with Rule G(6). Because Rule G(8) did not authorize striking
Hester’s claim, the district court abused its discretion by striking it. See Koon, 518
U.S. at 100.
6
In some cases, a district court could properly strike a claim under either Rule
G(8) or Rule 37.
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III.
Complying with the special-interrogatory rule does not guarantee that a
claimant has standing. See $284,950, 933 F.3d at 973. The district court did not
rule on Hester’s standing, but noted “significant questions.” The district court
should answer those questions in the first instance. See BNSF Ry. Co. v. Seats, Inc.,
900 F.3d 545, 549 (8th Cir. 2018) (“When it would be beneficial for the district court
to consider an alternative argument in the first instance, we may remand the matter
to the district court.”).
Moreover, Hester has not necessarily escaped sanctions. The district court’s
order solidified which requested information “fell within the scope of the
interrogator[ies] Mr. Hester was bound to answer under Supplemental Rule
G(6)(b).” Any future failure to respond as the district court directs could constitute
“failing to comply” with Rule G(6), justifying striking the claim under Rule G(8).
*******
The judgment is reversed, and the case remanded for further proceedings not
inconsistent with this opinion.
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