United States v. Lazarenko ( 2007 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA,  No. 06-10273
Plaintiff-Appellee,
D.C. No.
LIQUIDATORS APPOINTED BY THE CR-00-00284-MJJ
HIGH COURT OF ANTIGUA FOR
ORDER

EUROFED BANK, LTD.,
AMENDING
Claimants-Appellants,
OPINION AND ON
v. PETITIONS FOR
PAVEL IVANOVICH LAZARENKO, REHEARING AND
Pavlo Ivanovych Lazarenko, AMENDED
Defendant-Appellee.
 OPINION
Appeal from the United States District Court
for the Northern District of California
Martin J. Jenkins, District Judge, Presiding
Argued and Submitted
October 18, 2006—San Francisco, California
Filed November 21, 2006
Amended February 7, 2007
Before: Sandra Day O’Connor, Associate Justice,* and
Susan P. Graber and Richard C. Tallman, Circuit Judges.
Opinion by Judge Tallman
*The Honorable Sandra Day O’Connor, Associate Justice of the United
States Supreme Court (Ret.), sitting by designation pursuant to 28 U.S.C.
§ 294(a).
1481
UNITED STATES v. LAZARENKO 1485
COUNSEL
Rory K. Little (argued), Gordon A. Greenberg, Matthew J.
Jacobs, and Peter J. Drobac, McDermott Will & Emery LLP,
Palo Alto, California, for the claimants-appellants.
Hartley West (argued) and Patricia J. Kenney, Assistant
United States Attorneys, San Francisco, California, for the
plaintiff-appellee.
ORDER
The Court rules on the pending petitions for rehearing and
Liquidators’ request to be heard as follows:
(1) The United States’ request to amend the opinion is
granted in part and denied in part. The opinion filed Novem-
ber 21, 2006, slip opinion 18657, and reported at 469 F.3d
815 (9th Cir. 2006), is hereby amended as follows:
At slip opinion 18666, starting at line 2 (469 F.3d at 820),
modify the first full sentence to state: “Section 982(b)(1)
incorporates the standards and procedures, other than subsec-
tion (d), for forfeiting property under the Comprehensive
Drug Abuse Prevention and Control Act of 1970, 21 U.S.C.
§ 853.”
1486 UNITED STATES v. LAZARENKO
At slip opinion 18666, beginning at the second paragraph
(469 F.3d at 820), delete: “Property of a person convicted of
violating 18 U.S.C. § 1956 is presumed subject to forfeiture
if the United States establishes by a preponderance of the evi-
dence that (1) the defendant acquired the property during the
period he violated 18 U.S.C. § 1956 or within a reasonable
time thereafter, and (2) no likely legitimate source exists for
the property other than that traceable to the violation itself. 21
U.S.C. § 853(d). The trier of fact may decline to apply the
rebuttable presumption if not merited under the facts of the
case or if the defendant produces evidence that casts doubt on
its validity. See S. REP. NO. 98-225, at 212.”
With these amendments, the panel has voted to deny the
United States’ petition for rehearing. The panel has also voted
to deny the Liquidators’ petition for rehearing, with sugges-
tion for rehearing en banc. The full court has been advised of
Liquidators’ petition for rehearing en banc and no judge of the
court has requested a vote on it. The petitions are DENIED,
and no further petitions for rehearing may be filed.
(2) The panel also denies Liquidators’ “Request to be
Heard in Response to the United States’ Petition for Rehear-
ing or For Clarification.”
OPINION
TALLMAN, Circuit Judge:
This unusual appeal follows the government’s seizure of
approximately $2.5 million in assets from former Ukrainian
Prime Minister Pavel Ivanovich Lazarenko (“Lazarenko”). A
jury in the United States District Court for the Northern Dis-
trict of California convicted Lazarenko on several counts of
money laundering in violation of 18 U.S.C. § 1956. The
United States contends that it seized the funds and bonds law-
UNITED STATES v. LAZARENKO 1487
fully under criminal forfeiture law. See 18 U.S.C. § 982(a)(1);
21 U.S.C. § 853. Lazarenko has been sentenced, but has not
yet appealed his conviction. The United States maintains that
Lazarenko and a business associate purchased a majority
share of an off-shore bank, European Federal Credit Bank
(“Eurofed”), to launder the proceeds of illegal activity.
Lazarenko and others would deposit the money in a San Fran-
cisco bank, which had a correspondent relationship with the
off-shore Eurofed bank in Antigua. Third-party claimants
include two PricewaterhouseCoopers partners appointed as
Liquidators of Eurofed (“Liquidators”). They contend that
they own the forfeited funds and bonds pursuant to an order
from the High Court of Antigua appointing them to collect
and distribute the bank’s assets to depositors and creditors.
Liquidators seek interlocutory appeal from two orders aris-
ing from the United States’ efforts to seize the funds and
bonds: (1) an order denying Liquidators’ motion to set an
immediate hearing on their earlier filed “Motion for Return of
Illegally Seized Funds” (“seizure motion”), and (2) a prelimi-
nary order of forfeiture the district court entered after
Lazarenko’s guilty verdict. Liquidators challenge both orders
on numerous grounds. We must first determine, however,
whether Liquidators have standing to invoke the jurisdiction
of this Court before the district court concludes ancillary pro-
ceedings. We hold that they do not. We further conclude that
the controversy is not yet ripe for judicial review. We there-
fore dismiss this appeal for lack of appellate jurisdiction.
I
In July 2001, a federal grand jury for the Northern District
of California returned a second superseding indictment charg-
ing Lazarenko with conspiracy to commit money laundering
(count 1), 18 U.S.C. § 1956(h); money laundering (counts 2-
5 and 6-8), id. § 1956; wire fraud (counts 9-30), id. § 1343;
and transportation of stolen property (counts 31-53), id.
§ 2314.
1488 UNITED STATES v. LAZARENKO
A conviction under 18 U.S.C. § 1956 subjects a defendant
to forfeiture of any property, real or personal, involved in or
traceable to the offense. Id. § 982(a)(1). Accordingly, the
indictment included a criminal forfeiture allegation under 18
U.S.C. § 982(a)(1). The indictment advised Lazarenko that, as
a result of Counts 1-8, the United States would seek forfeiture
of all property connected to his money laundering offenses,
including, but not limited to, specified assets.
On June 3, 2004, a petit jury convicted Lazarenko of con-
spiracy to commit money laundering (count 1), several counts
of money laundering (counts 2-8), wire fraud (counts 20-29),
and transportation of stolen property (counts 31 and 43-52).
The jury found that Lazarenko conspired to launder and laun-
dered the proceeds of specified unlawful activity—foreign
extortion, wire fraud, and transportation of stolen property.
He did so through various banks in the United States, Switzer-
land, Antigua, and elsewhere. Lazarenko waived a jury deter-
mination on special findings related to the forfeiture
allegations and proceeded to trial on the substantive criminal
counts of the indictment. Following Lazarenko’s conviction,
but before the district court sentenced Lazarenko, the govern-
ment initiated separate civil forfeiture proceedings by filing a
complaint against the res, No. C 05-946 MJJ. The Clerk of
Court for the Northern District of California reassigned the
civil action to the Honorable Martin J. Jenkins, as related to
the underlying criminal action already pending before Judge
Jenkins, No. CR 00-0284 MJJ.
In January 2005, the government obtained a civil seizure
warrant for the assets at issue here—U.S. $2.5 million in
funds and Ukrainian bonds on deposit with Bank of America.
The funds and bonds comprise two accounts containing
$1,379,879 and $327,544.09, respectively, and an account
containing 923,000 Ukrainian bonds. The government filed its
civil complaint against the funds and bonds under 18 U.S.C.
§ 981 in March 2005. Liquidators answered because the com-
plaint named assets held in the name of Eurofed as defendant.
UNITED STATES v. LAZARENKO 1489
In September 2005, Liquidators moved for summary judg-
ment. The district court granted that motion and dismissed the
civil forfeiture action on October 26, 2005, as barred by the
applicable statute of limitation, 19 U.S.C. § 1621. That same
day, the government obtained a criminal seizure warrant for
the same res under 21 U.S.C. § 853(f).
Liquidators contend the seized funds and bonds belong to
Eurofed because, in December 1999, the High Court of Anti-
gua appointed Liquidators to collect and distribute Eurofed’s
assets to its depositors and creditors (who include Lazarenko
and his associates). As a result, in January 2006, Liquidators
moved the district court to vacate the criminal seizure warrant
and immediately return the funds and bonds to the Antiguan
liquidation proceedings, so they may distribute the funds and
bonds as directed by the Antiguan High Court. Liquidators
challenge the United States’ probable cause to seize the
assets, and they invoke the doctrines of res judicata, the stat-
ute of limitation, the act of state doctrine, and Eurofed’s supe-
rior claim to ownership as grounds to vacate the seizure
warrant. In March 2006, Liquidators applied ex parte to Judge
Jenkins for an immediate hearing on their motion for return
of the illegally seized funds. N.D. Cal. Crim. R. 47-1 & 47-3.
Liquidators claimed that United States v. Crozier, 777 F.2d
1376 (9th Cir. 1985), afforded them the right to a constitution-
ally mandated and immediate hearing. They reasoned that
waiting to commence the ancillary proceedings contemplated
by 21 U.S.C. § 853(n) until the district court sentenced
Lazarenko would not sufficiently protect their due process
rights to a reasonably prompt opportunity to contest the seized
property to which they claim ownership. Liquidators press
these same arguments on appeal.
After holding a telephonic conference with all interested
parties, the district court denied Liquidators’ ex parte applica-
tion. The district court found that setting a hearing on Liqui-
dators’ motion after sentencing Lazarenko comported with
due process, as Congress has provided for ancillary proceed-
1490 UNITED STATES v. LAZARENKO
ings on the heels of a sentence imposed upon conviction of a
particular crime, 21 U.S.C. § 853(n). Soon thereafter, the dis-
trict court granted the United States’ application for a prelimi-
nary order of forfeiture under 18 U.S.C. § 982(a)(1) and
Federal Rule of Criminal Procedure 32.2(b). Liquidators now
seek to appeal both orders and seek a writ of mandamus com-
pelling the district court to order the United States to return
the assets to Liquidators immediately.
On May 24, 2006, Liquidators filed a provisional and pre-
cautionary petition with Judge Jenkins to adjudicate Liquida-
tors’ interest in the funds and bonds. The parties inform us
that Judge Jenkins has taken that application under advise-
ment and awaits action from this court before deciding
whether to proceed with the ancillary proceedings. During the
pendency of this appeal, on August 25, 2006, the district court
sentenced Lazarenko, and on September 29, 2006, Judge Jen-
kins entered a final order of forfeiture against Lazarenko. The
district court has scheduled a status conference to address
whether the district court should stay further ancillary pro-
ceedings until we resolve Liquidators’ appeal.
II
Liquidators essentially challenge the entire process Con-
gress prescribed for third parties to adjudicate their interest in
property subject to forfeiture. Without reaching the merits of
this claim, we must first review criminal forfeiture as crafted
by Congress because it impacts our standing analysis.
Courts impose criminal forfeiture as punishment following
conviction of a substantive criminal offense. Libretti v. United
States, 516 U.S. 29, 39 (1995). Criminal forfeiture operates in
personam against a defendant to divest him of his title to pro-
ceeds from his unlawful activity as a consequence of his crim-
inal conviction. United States v. Nava, 404 F.3d 1119, 1124
(9th Cir. 2005). Title 18 U.S.C. § 982(a)(1) directs a court to
order forfeiture as an additional sanction when sentencing a
UNITED STATES v. LAZARENKO 1491
person convicted of violating 18 U.S.C. § 1956. United States
v. Bajakajian, 524 U.S. 321, 328 (1998). Section 982(b)(1)
incorporates the standards and procedures, other than subsec-
tion (d), for forfeiting property under the Comprehensive
Drug Abuse Prevention and Control Act of 1970, 21 U.S.C.
§ 853.
A court may not enter judgment of forfeiture in a criminal
proceeding unless the indictment notifies the defendant that
the government seeks criminal forfeiture in accordance with
the applicable statute. Fed. R. Crim. P. 7(c)(2); Fed. R. Crim.
P. 32.2(a). Criminal forfeiture reaches any property involved
in the offense or any property traceable as proceeds to it. 18
U.S.C. § 982(a)(1). Forfeiture relates back to the time of the
criminal acts giving rise to the forfeiture. 21 U.S.C. § 853(c).
In other words, the United States’ interest in the property
vests at the time the defendant commits the crime. Id. Other-
wise, a defendant could attempt to avoid criminal forfeiture
by transferring his property to another party before convic-
tion. See S. REP. NO. 98-225, at 212 (1983), as reprinted in
1984 U.S.C.C.A.N. 3182, 3383-84, 3394.
[1] Upon a finding that the property involved is subject to
forfeiture, a court must promptly enter a preliminary order of
forfeiture without regard to a third party’s interests in the
property. See Fed. R. Crim. P. 32.2(b)(2); see also United
States v. Monsanto, 491 U.S. 600, 607 (1989) (“Congress
could not have chosen stronger words to express its intent that
forfeiture be mandatory in cases where the statute applied, or
broader words to define the scope of what was to be forfeit-
ed.”). A preliminary order of forfeiture becomes final at sen-
tencing. Fed. R. Crim. P. 32.2(b)(3).
[2] Section 853(n) provides the process for vindicating a
third party’s interests in forfeited property. The law appears
settled that an ancillary proceeding constitutes the only ave-
nue for a third party claiming an interest in seized property.
See Libretti, 516 U.S. at 44 (noting that Congress has deter-
1492 UNITED STATES v. LAZARENKO
mined that § 853(n) provides the means to vindicate third-
party rights); Nava, 404 F.3d at 1125 (“We have held that
third parties must await the defendant’s conviction before fil-
ing proceedings to protect their interest in the property and
must await the court’s order of forfeiture before requesting an
ancillary hearing.” (citing Crozier, 777 F.2d at 1382-83)).
[3] A third party claiming an interest in property subject to
forfeiture may not intervene in a trial or appeal of a criminal
case involving the forfeiture. 21 U.S.C. § 853(k)(1). Nor may
a third party commence an action at law or equity against the
United States concerning the validity of the alleged interest
after the United States files an indictment with a forfeiture
allegation. Id. § 853(k)(2). Rather, a court adjudicates a third
party’s interest in the forfeited property in an ancillary pro-
ceeding after concluding the criminal case and entering a pre-
liminary order of forfeiture. Fed. R. Crim. P. 32.2(b) advisory
committee’s note.
After a court enters the forfeiture order, the United States
must notify the public. 21 U.S.C. § 853(n)(1). Within thirty
days after the United States publishes final notice or a third
party receives notice, whichever is earlier, the third party
must petition the court for a hearing to adjudicate the validity
of its alleged interest in the property. Id. § 853(n)(2). To the
extent practicable, the court must hold the ancillary proceed-
ing within thirty days of the petition. Id. § 853(n)(4). At the
ancillary proceeding, third-party petitioners may present evi-
dence and witnesses on their own behalf, and they may cross-
examine witnesses who appear at the hearing. Id. § 853(n)(5).
Upon determining that a petitioner establishes by a preponder-
ance of the evidence that he (1) had a vested or superior right,
title, or interest in the property when the defendant committed
the acts giving rise to the forfeiture, or (2) is a bonafide pur-
chaser for value of the right, title, or interest in the property
and at the time of the purchase was reasonably without cause
to believe the property was subject to forfeiture, the court
UNITED STATES v. LAZARENKO 1493
must amend the order of forfeiture to accommodate that inter-
est. Id. § 853(n)(6).
III
Liquidators insist the Court must order the United States
immediately to return the funds and bonds to Liquidators and
deem the seizure and attempted forfeiture improper, given the
district court’s delay in hearing Liquidators’ claims. Liquida-
tors contend that the district court unlawfully entered the pre-
liminary order of forfeiture because (1) the government
sought criminal forfeiture beyond the limitation period, (2) res
judicata bars the criminal forfeiture, (3) the criminal seizure
violates the act of state doctrine, and (4) the forfeiture
improperly extends to property Liquidators own. Liquidators
further contend the district court’s order denying them an
immediate hearing violates their right to due process under
the Fifth Amendment.
Liquidators also assert appellate jurisdiction over the pre-
liminary order of forfeiture under 28 U.S.C. § 1292(a)(1).
Liquidators assert appellate jurisdiction over the order deny-
ing them an immediate hearing under the collateral order doc-
trine. We reach neither our jurisdiction over these orders nor
the merits of Liquidators’ claims because Liquidators’ chal-
lenge presents an insurmountable threshold issue of justicia-
bility.
A
We must always examine our own jurisdiction before
deciding the merits of a dispute. Friends of the Earth, Inc. v.
Laidlaw Envtl. Servs., Inc., 528 U.S. 167, 180 (2000); Friery
v. L.A. Unified Sch. Dist., 448 F.3d 1146, 1148 (9th Cir.
2006). The Constitution’s case-or-controversy limitation on
federal judicial authority is the lynchpin for standing and ripe-
ness jurisprudence. Friends of the Earth, Inc., 528 U.S. at
180. The standing doctrine determines “whether the litigant is
1494 UNITED STATES v. LAZARENKO
entitled to have the court decide the merits of the dispute or
of particular issues.” Warth v. Seldin, 422 U.S. 490, 498
(1975). “[C]oncern[s] about the proper—and properly limited
—role of the courts in a democratic society” underlie the
standing doctrine. Id. The ripeness doctrine prevents courts
from deciding cases prematurely. Nat’l Park Hospitality Ass’n
v. Dep’t of the Interior, 538 U.S. 803, 807 (2003).
Both standing and ripeness jurisprudence include a consti-
tutional component, rooted in the Constitution’s case-or-
controversy requirement, and a prudential component, which
embraces judicially self-imposed restraints on federal jurisdic-
tion. Elk Grove Unified Sch. Dist. v. Newdow, 542 U.S. 1, 11
(2004); Nat’l Park Hospitality Ass’n, 538 U.S. at 808. A liti-
gant must satisfy both to seek redress in federal court.
Nuclear Info. & Res. Serv. v. Nuclear Regulatory Comm’n,
457 F.3d 941, 949-50 (9th Cir. 2006).
[4] Persons seeking appellate review, like those who appear
in courts of first instance, must satisfy Article III standing.
Arizonians for Official English v. Arizona, 520 U.S. 43, 64
(1997). To establish Article III standing, a litigant must show
that the allegedly unlawful conduct caused him to suffer an
actual or imminent injury—not a hypothetical, conjectural, or
abstract injury—that a favorable decision would likely
redress. Elk Grove Unified Sch. Dist., 542 U.S. at 12; Allen
v. Wright, 468 U.S. 737, 751 (1984). Courts often treat the
constitutional component of ripeness under the rubric of
standing; indeed, “in many cases, ripeness coincides squarely
with standing’s injury in fact prong.” Thomas v. Anchorage
Equal Rights Comm’n, 220 F.3d 1134, 1138 (9th Cir. 2000)
(en banc). This statement rings true here.
[5] A litigant must also meet non-constitutional or pruden-
tial requirements to invoke federal jurisdiction. Prudential
standing encompasses “the general prohibition on a litigant’s
raising another person’s legal rights, the rule barring adjudica-
tion of generalized grievances more appropriately addressed
UNITED STATES v. LAZARENKO 1495
in representative branches, and the requirement that a plain-
tiff’s complaint fall within the zone of interests protected by
the law invoked.” Allen, 468 U.S. at 751. The prudential com-
ponent of the ripeness requirement focuses on the adequacy
of the record to ensure effective review. Portman v. County
of Santa Clara, 995 F.2d 898, 903 (9th Cir. 1993).
B
We first address the injury requirement for Article III
standing and ripeness, which ultimately sounds the death
knell for Liquidators’ interlocutory appeal. Liquidators claim
two injuries: (1) unlawful restraint on the assets seized from
their bank accounts, and (2) denial of an immediate hearing
after the government seized their property. Both, according to
Liquidators, constitute an “injury” sufficient to satisfy Article
III standing. We disagree.
[6] Neither constitutes a legally cognizable injury in light
of the statutory scheme specifying the process accorded to
Liquidators in connection with a criminal forfeiture. Section
853(n) provides Liquidators an adequate opportunity to pro-
tect their claimed interest in the funds and bonds in an ancil-
lary proceeding where they may present evidence, offer
witnesses, and cross-examine witnesses who appear at the
hearing. 21 U.S.C. § 853(n)(5). Although the government
seized the funds and bonds from accounts Liquidators control,
whether the seizure actually injures Liquidators is conjectural
or hypothetical because it depends on the district court’s find-
ings on who possesses superior title to the res under
§ 853(n)(6). If the district court determines that Liquidators
have a superior legal right, title, or interest in the property, the
court must amend the order of forfeiture to divest the United
States’ interest in the forfeited property. Id. § 853(n)(6).
Moreover, as government counsel conceded at oral argument,
Liquidators may obtain pre-judgment accrued interest in the
amount the government actually earned while wrongfully
1496 UNITED STATES v. LAZARENKO
holding the money.1 The district court shall bind the govern-
ment accordingly if it ultimately rules in Liquidators’ favor.
Liquidators present no reason why the ancillary proceeding
would inadequately protect their interest in adjudicating their
competing claim to the property. In the proceedings that we
understand the district court will promptly commence below,
Liquidators may present all arguments and defenses to defeat
the government’s forfeiture, including those raised in their
seizure motion and on appeal.2 We express no opinion on the
merits of those arguments, and the district court may freely
apply the law to the facts as it finds them during the ancillary
proceedings. The district court deferred hearing Liquidators’
motion for return of the seized funds until the ancillary pro-
ceeding and at no time held that it would not consider the
arguments raised in their seizure motion.
[7] At oral argument, Liquidators’ counsel attributed the
inadequacy of the ancillary proceeding to the delay between
the government’s seizure and the hearing on their claims.
Relying on Crozier, Liquidators contend that allowing the
government’s seizure without holding a prompt hearing vio-
lates Liquidators’ constitutional right to due process. Specifi-
cally, they argue that a delay of “sixteen months” denies them
due process. The parties dispute the amount of the delay. Liq-
1
Counsel for the United States stated at oral argument after conferring
with the Asset Forfeiture Unit of the United States Department of Justice,
Criminal Division, that she was authorized to concede Liquidators’ right
to collect pre-judgment accrued interest if they should prevail on the mer-
its of their claim. We accept that concession and direct that the district
court shall impose pre-judgment accrued interest on remand if it ultimately
rules in Liquidators’ favor after concluding the ancillary proceedings.
Interest shall run from the date of the initial civil seizure.
2
To clarify, these include whether: (1) the government seized the funds
outside the limitation period, (2) res judicata bars the criminal seizure, (3)
the criminal seizure violates the act of state doctrine, (4) the affidavits sub-
mitted to support the government’s seizure lack probable cause, and (5)
the criminal forfeiture improperly extends to assets Liquidators own.
UNITED STATES v. LAZARENKO 1497
uidators calculate the delay from January 2005, when the gov-
ernment seized the funds civilly, whereas the government
calculates the period of delay from its criminal seizure in
October 2005. Regardless, Liquidators fail to demonstrate that
the delay actually injured them. Although an unreasonable
delay could invoke due process concerns, a point evident from
Crozier, we hold that the delay here is not of such magnitude
that it violates the Constitution because the period of delay
differs from the period in Crozier by a matter of years. We
caution, however, that an inordinate delay beyond that pres-
ented here could deprive constitutional rights to prompt due
process notice and hearing. We leave for another day the
articulation of when such a violation could occur.
[8] In Crozier, we considered due process concerns in a
case filed more than five years earlier, with a pre-trial
restraining order issued years earlier, and where the defen-
dants’ trial and appeals could delay ancillary proceedings for
several more years. Crozier, 777 F.2d at 1384. Here, in con-
trast, the district court has already sentenced Lazarenko and
stands by, awaiting the results of Liquidators’ appeal to initi-
ate ancillary proceedings. We see no reason to delay those
proceedings from going forward. Should Liquidators be dis-
satisfied with the results, they may raise all issues that they
now press on subsequent appeal from an adverse final judg-
ment at the close of those proceedings.
[9] In sum, Liquidators fail to identify a concrete and immi-
nent injury where, as soon as our mandate issues, they may
adequately seek to perfect their claimed superior interests in
the funds and bonds in the ancillary proceeding. Given the
relatively short delay compared to Crozier, and Liquidators’
failure to adduce sufficient evidence in the record establishing
a particularized injury that the district court cannot adequately
redress below, we hold that Liquidators currently fail to sat-
isfy the constitutional requirements of standing and ripeness.
1498 UNITED STATES v. LAZARENKO
C
Even were we to conclude that Liquidators satisfy the con-
stitutional component of standing and ripeness, we would still
dismiss because this case raises prudential concerns under
standing and ripeness jurisprudence.
1
[10] Although Liquidators raise their own legal rights, not
those of a third party, this appeal offends one prudential
standing principle. Namely, courts refrain from adjudicating
“ ‘abstract questions of wide public significance’ which
amount to ‘generalized grievances,’ pervasively shared and
most appropriately addressed in the representative branches.”
Valley Forge Christian Coll. v. Am. United for Separation of
Church & State, Inc., 454 U.S. 464, 475 (1982) (quoting
Warth, 422 U.S. at 499-500). A generalized harm shared in
substantially equal measure by all or a large class of citizens
does not by itself warrant exercise of jurisdiction. Warth, 422
U.S. at 499.
[11] Liquidators raise a generalized grievance about the
statutory scheme governing criminal forfeiture. Liquidators
claim not that the district court violated 21 U.S.C. § 853, but
that the statute Congress enacted violates due process and
fails to adequately protect third-party interests because it takes
too long to address their claims. Any third-party claimant
could attack § 853(n) on due process grounds where a district
court defers hearing on third-party claims ancillary to sentenc-
ing. This poses a problem because, until the district court in
the criminal case determines what property may be forfeited,
the district court cannot determine practically who possesses
superior title—the United States under the “relation back”
provision, 21 U.S.C. § 853(c), or a third-party claimant who
meets the statutory standards, id. § 853(n)(6). Moreover,
affording third parties standing under the circumstances here,
before a district court holds an ancillary proceeding, would
UNITED STATES v. LAZARENKO 1499
shun the procedures Congress deliberately enacted to vindi-
cate third-party claims. Accordingly, Liquidators cannot
establish prudential standing. See Smelt v. County of Orange,
447 F.3d 673, 684-85 (9th Cir. 2006) (holding that same-sex
couple lacked standing to challenge the federal Defense of
Marriage Act’s definition of marriage because every taxpayer
and citizen in the country could theoretically challenge the
definition for not including some favored group), cert.
denied., 75 U.S.L.W. 3195 (U.S. Oct. 10, 2006) (No. 06-
5742).
2
[12] Nor do Liquidators meet the prudential component of
the ripeness doctrine. We determine if a case is ripe for
review by evaluating whether (1) the issues are fit for judicial
decision, and (2) the parties will suffer hardship if we with-
hold decision. Nat’l Park Hospitality Ass’n, 538 U.S. at 808.
[13] For the first prong, we evaluate “whether the contro-
versy generated is essentially legal in nature or whether fur-
ther factual amplification is necessary.” W. Oil & Gas Ass’n
v. Sonoma County, 905 F.2d 1287, 1291 (9th Cir. 1990). Liq-
uidators’ appeal involves issues not entirely developed in the
record before us. The district court deferred the ancillary pro-
ceeding until after Lazarenko’s sentencing. At the ancillary
proceeding, Liquidators and the government may introduce
evidence and witnesses, and the district court must consider
relevant portions of the criminal record. 21 U.S.C.
§ 853(n)(5). Whether Liquidators possess a superior interest
under § 853(n)(6) requires further factual development.
Thomas, 220 F.3d at 1142. Liquidators may indeed establish
a superior claim to the funds and bonds. In addition, at oral
argument, Liquidators’ counsel challenged the government’s
probable cause to seize the funds and bonds, particularly
alleging that they were traceable only to counts the district
court dismissed at trial. Liquidators may well be able to
develop facts showing the government lacked probable cause
1500 UNITED STATES v. LAZARENKO
on those counts and the assets linked to them. At this point,
however, unresolved factual issues make Liquidators’ action
unfit for our review. W. Oil & Gas Ass’n, 905 F.2d at 1291.
[14] Turning to the second consideration, Liquidators fail
to persuade us that postponing review imposes a “direct and
immediate hardship” on them. Chavez v. Director, 961 F.2d
1409, 1415 (9th Cir. 1992). Without evidence in the record
and without supporting facts, Liquidators conclude that the
“rulings are ‘ripe’ and have a demonstrable ‘adverse effect’
on the Liquidators’ interests.” Liquidators’ ability to adjudi-
cate their claims following our mandate undermines their
claims of hardship. These conclusory claims of hardship sim-
ply fail to satisfy Liquidators’ burden of proving ripeness.
Pettis ex rel. United States v. Morrison-Knudsen Co., 577
F.2d 668, 674 (9th Cir. 1978). Resolving this appeal and issu-
ing our mandate returning jurisdiction to the district court to
commence ancillary proceedings constitutes the only impedi-
ment to promptly adjudicating unresolved legal and factual
issues surrounding Liquidators’ entitlement to the res. If the
district court ultimately determines the funds were wrongfully
seized, an award of pre-judgment accrued interest, along with
the return of the res, will redress the damage.
IV
We hold that Liquidators may adequately protect their
interest in the funds and bonds in the ancillary proceeding
under § 853(n). Congress designated no other means for third
parties to vindicate their interest in forfeited property.
Because Liquidators may present all legal arguments that
might bar the government’s forfeiture in the proceedings
below, and because the district court is prepared to undertake
the ancillary proceedings promptly, we further hold that Liq-
uidators fail to satisfy the constitutional and prudential com-
ponents of standing and ripeness. Accordingly, we dismiss
this appeal for lack of jurisdiction.
DISMISSED.