UNITED STATES v. APPROXIMATELY 11 360 IN CURRENCY (2024)

ORDER

1. INTRODUCTION

Plaintiff the United States (the “United States”) filed this action for civil forfeiture in rem on June 5, 2023. ECF No. 1. After an extensive back-and-forth with putative claimant Barbie Byers (“Byers”), the United States has moved (1) to strike her claims and answer and (2) for default judgment against the defendant property. ECF No. 20. Byers has not responded to the motion for default judgment, and the time in which to do so has expired. Civ. L.R. 7(b). For the reasons stated below, the motion will be granted in full, Byers's non-compliant submissions will be stricken, and default judgment will be entered against the defendant property.

2. FACTUAL AND PROCEDURAL BACKGROUND

The United States’ verified complaint in this matter alleges that the defendant currency was “used or intended to be used in exchange for controlled substances, represents proceeds of trafficking in controlled substances, or was used or intended to be used to facilitate a violation of 21 U.S.C. § 841(a)(1).” ECF No. 1 at 2; see also id. at 2–7 (outlining factual basis for forfeiture). Accordingly, the United States contends that the defendant currency is subject to forfeiture pursuant to 21 U.S.C. § 881(a)(6). Id. at 8.¹

According to the complaint, the defendant currency was seized from a residence on North 40th Street in Milwaukee, where Byers stated she resides. Id. at 6–7. Byers allegedly stated that her son Jarrell Jones (“Jones”) also lives at the North 40th Street residence “when he is in town.” Id. at 7.

The complaint alleges a string of events through which Jones allegedly ended up conducting drug-related activity in the North 40th Street residence. Two “suspicious” parcels were separately delivered to two Milwaukee addresses associated with Jones: an address on North 35th Street, which is Jones's address on file with the Wisconsin Department of Transportation, and an address on West Swan Circle, to which Jones's vehicle is registered. Id. at 4. Those two parcels were mailed from California, and each was addressed to a “fictitious” recipient who was “not associated with” the given mailing address. Id. The United States Postal Inspection Service obtained a warrant for the parcel delivered to the West Swan Circle address and opened it, discovering four bricks of cocaine totaling approximately 4,676 grams. Id.

Officers conducted a “controlled delivery” of the parcel addressed to the North 35th Street residence. Id. Officers observed an individual, “W.B.,” bring the parcel inside the North 35th Street residence and then a short time later exit that residence, holding the parcel. Id. at 4–5. W.B. then got into the passenger seat of a Chevy Malibu, which drove away. Id. at 5. About an hour later, the Chevy Malibu arrived at the North 40th Street residence; W.B. and another individual got out, “removed from the vehicle what appeared to be the same parcel that had been delivered to the N[orth] 35th Street residence about one hour earlier, and entered the ․ [North 40th Street] residence with the parcel.” Id. Jones, who during this intervening hour was suspected to have “conducted a ․ narcotics transaction” elsewhere, then arrived back at the North 40th Street residence and entered it. Id.

Two days later, officers executed a search warrant on the North 40th Street residence and found firearms, controlled substances, items associated with drug distribution, mail addressed to Jones, and the defendant currency. Id. at 5–6. Also at that time, Byers gave the above-referenced statement that she resided at the North 40th Street and that Jones sometimes did so. Id. at 7. Jones was later charged in a state prosecution with drug possession with intent to deliver and being a felon in possession of a firearm. Id.

The Drug Enforcement Administration (“DEA”) initiated administrative forfeiture proceedings against the defendant currency. Id. at 8. In March 2023, Byers filed a claim to the defendant currency with the DEA. Id. The United States filed its complaint in this matter several months later.

A warrant of arrest in rem as to the defendant currency was issued on June 6, 2023. ECF No. 10 at 2–3. The same day, the United States filed Notices of the Complaint for Civil Forfeiture of Property and served them by certified mail, along with copies of the verified complaint in this matter, on potential claimants Byers and Jones at their last known residences and Jones's alternate addresses. ECF Nos. 5–9.² Those notices informed Byers and Jones that, if they wished to assert a claim to the defendant currency, they had to do so within thirty-five days of the date of the notice, and additionally had to serve an answer to the complaint within twenty-one days of filing their claim. See, e.g., ECF No. 9. Because the notice was dated June 6, 2023, any claim to the defendant currency by Byers or Jones was due on July 11, 2023.

According to United States Postal Service tracking reports, Byers and Jones received those notices, but neither filed a claim by the deadline. ECF No. 20 at 2. On July 18, 2023, the United States filed a letter advising the Court that no claims had been filed in this action, that the time limit for doing so had expired, and that if a valid claim was not filed on or before August 3, 2023, the United States intended to move for a default judgment. ECF No. 12 (also reminding potential claimants of their obligation to file an answer or responsive pleading to the United States’ complaint within twenty-one days of filing the claim). The United States sent copies of this letter to Byers and Jones by certified and first-class mail. Id. at 3.

On July 26, 2023, Byers filed a claim to the defendant currency. ECF No. 13. However, on the same day, the United States advised Byers in a letter that her claim did not meet the requirements of Rule G(5)(a) of the Federal Rules of Civil Procedure, Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (hereinafter “Supplemental Rule G(5)(a)”). ECF No. 15 (“The claim ․ does not identify the specific property she is claiming and it was not signed by Ms. Byers under penalty of perjury.”). Taking into account Byers's pro se status, the United States said it “would not object to [her] filing a corrected claim on or before August 9, 2023” but made clear its intention to move to strike her original claim as deficient and move for default judgment if Byers failed to submit an amended claim that met Supplemental Rule G(5)(a)’s requirements. Id. at 1. The United States further reiterated that Byers was required to file an answer within twenty-one days of filing a claim, and that any answer “must respond to each of the numbered paragraphs in the complaint.” Id. at 1–2. The United States sent a copy of its letter to Byers. Id. at 2.

On August 2, 2023, Byers filed an amended claim that cured the deficiencies the United States previously identified. ECF No. 16.³ Accordingly, her deadline to answer or otherwise respond under Federal Rule of Civil Procedure 12 was August 23, 2023. Fed. R. Civ. P. Supp. R. G(5)(b) (hereinafter “Supplemental Rule G(5)(b)”) (“A claimant must serve and file an answer to the complaint or a motion under [Federal] Rule [of Civil Procedure] 12 within 21 days after filing the claim.”). That date came and went with no filing from Plaintiff.

The United States filed a letter on September 5, 2023 and mailed it to Byers, in which it noted that she had not filed an answer by the deadline. ECF No. 17 at 2–3 (also quoting the July 26, 2023 letter, which notified Byers that any answer needed to “respond to each of the numbered paragraphs in the complaint”). The United States indicated its intent to move to strike her claim and for default judgment if she did not file an answer by September 25, 2023. Id. at 2.

Byers filed an answer on September 22, 2023. ECF No. 18. The answer generally refutes the complaint but does not respond to each of the numbered paragraphs in the complaint. See id. at 1 (“[T]he complaint states no criminal activity involving me or at my home. All facts stated pertained to Jarrell Jones and not myself․ I have no knowledge or facts of [a] suspicious parcel being delivered to addresses not associated with me nor was any brought to my home.”); id. at 2 (noting that she “ha[s] no criminal charge[ ]” and that “no criminal activity” took place at the North 40th Street residence so the seizure of the defendant currency was “a result of error”).

On September 27, 2023, the United States once again filed a letter and mailed it to Byers, notifying her that her “purported answer [wa]s not legally sufficient in that it does not respond to each of the numbered paragraphs in the complaint, as required under Federal Rule of Civil Procedure 8.” ECF No. 19 at 1. Accordingly, the United States notified Byers that she needed to file an answer complying with this requirement on or before October 19, 2023 to avoid the United States moving to strike her submissions and for default judgment. Id. Byers did not file anything by this date.

The United States now moves, pursuant to Rule G(8)(c) of the Federal Rules of Civil Procedure, Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions (hereinafter “Supplemental Rule G(8)(c)”), to strike Byers's claims and purported answer for failure to comply with Rule G and other applicable rules. ECF No. 20 at 1. The United States further moves for an order of default judgment under Federal Rule of Civil Procedure 55. Id. at 1.

3. ANALYSIS

As noted above, the United States moves—as it promised—to strike Byers's claims and answer and for default judgment against the defendant currency. It submits that, in order “to have statutory standing to intervene in a civil forfeiture action, a contesting party must first file a timely, verified claim and then a timely answer consistent with” Supplemental Rules G(5)(a) and (b). ECF No. 20 at 6 (citing United States v. $20,000 in U.S. Currency, 350 F. Supp 3d 1148 (D.N.M. 2018)). Further, it argues, strict compliance with the technical requirements applicable to claims and answers is required to demonstrate statutory standing to proceed. Id. at 7 (“A claimant's failure to file a sufficient answer is not a mere technical deficiency but rather means that she has no statutory standing to continue to pursue her claim.”).

Because Byers's answer does not meet all of the requirements of Supplemental Rule G(5)(b), Federal Rule of Civil Procedure 8 (“Federal Rule 8”), and Civil Local Rule 10, the United States argues, Byers does not have statutory standing as a claimant and her claims and answers must be stricken. Id. (citing Supplemental Rule G(8)(c)(1)).⁴ With Byers's submissions stricken, the United States argues, there is no barrier to entry of default judgment against the defendant currency, because neither Byers nor any other parties have submitted a valid claim to it. Id. at 8 (citing United States v. $27,601 in U.S. Currency, No. 17-CV-0442-LJV-MJR, 2018 WL 718572 (W.D.N.Y. Jan. 3, 2018), report and recommendation adopted, No. 17-CV-442, 2018 WL 706421 (W.D.N.Y. Feb. 5, 2018)).

“It is true that Rule G requires a claimant to comply with certain procedural requirements.” United States v. Funds in the Amount of $239,400, 795 F.3d 639, 643 (7th Cir. 2015) (citing United States v. Real Prop. Located at 17 Coon Creek Rd., Hawkins Bar, Cal., 787 F.3d 968, 973–74 (9th Cir. 2015)). Indeed, and as the Government notes, “[m]any courts have referred to these procedural requirements as ‘statutory standing and have held that it is established through compliance with Rule G.’ ” Id. (quoting 17 Coon Creek Rd., 787 F.3d at 973–74 (internal quotation marks omitted)).⁵

“[S]trict compliance with the filing requirements of the Supplemental Rules [for Admiralty or Maritime Claims and Asset Forfeiture Actions] is typically required,” but in some circumstances, “it has been held an abuse of discretion to strike a claim for failure to comply.” United States v. One 2005 Rolls Royce Phantom, No. 07 C 2870, 2008 WL 109114, at *2 (N.D. Ill. Jan. 8, 2008) (citing United States v. U.S. Currency, in the Amount of $103,387.27, 863 F.2d 555, 563 (7th Cir. 1988), and collecting other cases).

In this case, there is no question that Byers has not submitted an answer that meets Federal Rule 8’s requirement of admitting or denying each of the allegations in the United States’ complaint and Civil Local Rule 10's requirement of doing so in numbered paragraphs corresponding to those in the complaint. But what the significance of this fact should be is unclear; this requires the Court to examine two key assumptions that the United States has left unspoken and unexamined in its brief.

First, the Government has not specified whether Supplemental Rule G(5)(b) incorporates all the requirements of Federal 8 and the local rules of this District—in other words, why Byers should be bound by those requirements at all when they are not stated in the text of Supplemental Rule G(5)(b). This is a simple question, but an important one.⁶ Federal Rule 8 governs Byers's answer because “[t]o the extent that [Supplemental Rule G] does not address an issue ․ the Federal Rules of Civil Procedure also apply.” Fed. R. Civ. P. Supp. R. G(1). Similarly, by operation of Federal Rule of Civil Procedure 83, Civil Local Rule 10's requirement that an answer “respond in numbered paragraphs corresponding to the pleading to which it refers” applies to Byers's answer as well. Fed. R. Civ. P. 83(a) (“[A] district court ․ may adopt ․ [local] rules governing its practice” provided that those rules are “consistent with” the Federal Rules of Civil Procedure and federal law). Civil Local Rule 10 is consistent with Federal Rule 8. Byers, accordingly, must comply with both.

Unfortunately, as the Court noted earlier, her answer does not comply with either rule. While she generally responds to the accusations in the complaint, she has not specifically identified which of those accusations, contained in numbered paragraphs, she admits and which she denies. The Court cannot say that she has a good faith basis to deny all of the complaint's accusations, because she in fact does admit some of those accusations in her answer, such as the defendant property having been seized from the North 40th Street residence, which is her home. Compare ECF No. 1 at 1, 7 with ECF No. 18 at 1 (noting the currency was “seized from [her] home at ․ N[orth] 40th St[reet]”). The Court speculates that Byers did not respond to many of the United States’ allegations because she lacks sufficient knowledge to form a belief as to whether they are true or not, but if that was the case, she could have stated as much in her answer. Fed. R. Civ. P. 8(b)(5) (“A party that lacks knowledge or information sufficient to form a belief about the truth of an allegation must so state ․”). In any event, her failure to specifically deny or admit each of the United States’ accusations in the numbered paragraphs in its complaint is insufficient to constitute a denial of those allegations. Fed. R. Civ. P. 8(b)(6) (“An allegation—other than one relating to the amount of damages—is admitted if a responsive pleading is required and the allegation is not denied.”); see also United States v. 579,410.00 in U.S. Currency, No. 20-3333, 2021 WL 3172908, at *1–2 (C.D. Ill. July 27, 2021) (“The Complaint consists of 35 paragraphs․ The Answer responds to [and denies] the first two paragraphs of the Complaint[, raises two affirmative defenses, and does nothing more.] ․ The Government is entitled to know which allegations of its Complaint that Claimant admits and which allegations he denies.”).

Second, and having concluded that Byers's answer fails to meet the technical requirements of Supplemental Rule G(5)(b), Federal Rule 8, and Civil Local Rule 10, the Court also examines whether that failure is excusable. Rolls Royce, 2008 WL 109114, at *2 (citing $103,387.27, 863 F.2d at 563); see also Korte v. Sebelius, 735 F.3d 654, 668 (7th Cir. 2013) (noting that statutory standing, also known as prudential standing, is distinct from Article III standing and “can be waived” by the Court (citing G & S Holdings LLC v. Cont'l Cas. Co., 697 F.3d 534, 540 (7th Cir. 2012), and MainStreet Org. of Realtors v. Calumet City, 505 F.3d 742, 747 (7th Cir. 2007))). Relevant factors in this analysis include

(1) whether the claimant has advised the court and government of [her] interest in the defendant [property] before the claim deadline; (2) whether the government would be prejudiced by allowing [less than strict compliance with the procedural requirements]; (3) whether there has been a good-faith effort to comply initially with the procedural requirements; and (4) whether [it] would contravene the goals underlying the [procedural] requirements [to demand less than strict compliance with them].

United States v. Funds in Amount of Approximately $170,500, No. 14 CV 15, 2015 WL 1188169, at *3 (N.D. Ill. Mar. 12, 2015) (citing $103,387.27, 863 F.2d at 559–63).

Although it is a close call, the Court does not find it appropriate to excuse Byers's failure to meet the exact technical requirements of Supplemental Rule G(5)(b), Federal Rule 8, and Civil Local Rule 10. She has taken many steps to advise the Court and the United States of her interest in the defendant currency: she filed a claim in the DEA administrative proceeding, and she diligently responded to at least three of the United States’ four invitations to file submissions compliant with the applicable technical requirements. However, her initial claim was not timely filed, and neither was her answer; she made these submissions only when the United States prompted her that she needed to, and even then, she repeatedly failed to follow the instructions that the United States clearly laid out for her. The Court does not doubt that Byers wants the defendant currency, but it is not persuaded that she is making a good-faith effort to comply with all the procedural technicalities required to properly assert her claim. And while the Court is not convinced that the United States would be badly prejudiced by having to allow Byers yet another chance to file a compliant answer (which she has been prompted to do four times now), requiring the United States to continue this back-and-forth with her risks undermining the purpose of time limits for bringing claims in forfeiture actions. See $170,500, 2015 WL 1188169, at *4 (“[T]he purpose of the time limits ․ is to ‘force potential claimants to come forward as soon as possible ․ so that all interested parties can be heard and the dispute can be resolved expeditiously.’ ” (quoting United States v. $125,938.62, 370 F.3d 1325, 1328 (11th Cir. 2004))). It also risks undermining the purpose of requiring an answer to state what the answering party admits and denies, which is to put the government on notice of what it has to prove in the case. 579,410.00 in U.S. Currency, 2021 WL 3172908, at *3.

This conclusion is consistent with those of other district courts in this Circuit, which have insisted on rigid adherence to procedural requirements absent special circumstances. See, e.g., United States v. Approximately 64 Dogs, No. 4:16-CV-04074-SLD, 2017 WL 379404, at *3 (C.D. Ill. Jan. 26, 2017) (striking answers that were either not properly served on the government or filed late, and finding that because their pleadings were “procedurally deficient,” none of the putative claimants “established statutory standing”); United States v. Approximately $115000 US Currency from BMO Harris Bank Acct. Ending in 0338, No. 23-CV-323, 2023 WL 7489995, at *3 (E.D. Wis. Nov. 13, 2023), report and recommendation adopted, No. 23-CV-0323-BHL, 2024 WL 64785 (E.D. Wis. Jan. 5, 2024) (striking pleadings of putative claimants who filed a sufficient claim but failed to timely file an answer (citing United States v. Commodity Acct. No. 549 54930 at Saul Stone & Co., 219 F.3d 595, 598 (7th Cir. 2000))); Saul Stone & Co., 219 F.3d at 598 (affirming grant of summary judgment to United States where claimant “filed an answer two years after his claim”). It is also consistent with the tenet that, while “pro se filings must be construed liberally, ․ even pro se litigants must follow the rules of civil procedure.” Cunningham v. Foresters Fin. Servs., Inc., 300 F. Supp. 3d 1004, 1012 (N.D. Ind. 2018) (citing Cady v. Sheahan, 467 F.3d 1057, 1061 (7th Cir. 2006)).

For these reasons, the Court finds that Byers has failed to follow the applicable procedural requirements and has accordingly failed to establish statutory standing to pursue her claim in this matter. Her claims and answer must therefore be stricken pursuant to Supplemental Rule G(8)(c). The United States’ motion to strike is granted.

With no other claims to the defendant currency filed, the Court will grant the United States’ motion for default judgment and order that default judgment be entered in this case. Fed. R. Civ. P. 55.

4. CONCLUSION

For the reasons stated above, the United States’ motion will be granted. The Court finds that Byers failed to file a legally sufficient answer or a motion under Rule 12, as required under Rule G(5) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, Fed. R. Civ. P. 8(b), and Civil L.R. 10. As a result, her claims and answer will be stricken. Additionally, because no other timely verified claim has been filed as to the defendant currency, default judgment is appropriate.

Accordingly,

IT IS ORDERED that the United States’ motion to strike Claimant Barbie Byers's claims and answer and for default judgment, ECF No. 20, be and the same is hereby GRANTED;

IT IS FURTHER ORDERED that Claimant Barbie Byers's putative claims, ECF Nos. 13 and 16, and answer, ECF No. 18, be STRICKEN;

IT IS FURTHER ORDERED that the defendant property, approximately $11,360 in U.S. currency, be and the same is hereby FORFEITED to the United States and that no right, title, or interest in the defendant property shall exist in any other party;

IT IS FURTHER ORDERED that the defendant property shall be seized forthwith by the United States Marshal Service for the Eastern District of Wisconsin or its duly authorized agent and shall be disposed of according to law; and

IT IS FURTHER ORDERED that this action be and the same is hereby DISMISSED.

FOOTNOTES

1.   This statute provides that “[a]ll moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance ․ [and] all proceeds traceable to such an exchange” are “subject to forfeiture to the United States.” 21 U.S.C. § 881(a)(6).

2.   In addition to sending direct notice of its complaint to Byers and Jones, the Government published notice of this pending forfeiture on the internet. ECF No. 3. No other claims were filed.

3.   Therein, Byers swore that the defendant currency came from her husband's 401(k) retirement account and from “other income generated from our jobs.” ECF No. 16 at 1.

4.   The United States does not appear to dispute that Byers's amended claim, ECF No. 16, meets the requirements of Supplemental Rule G(5)(a).

5.   As these authorities show, the United States’ argument for striking Byers's submissions finds some support in the case law of this circuit. But the United States sent the Court to hunt for those cases, and it premised its brief exclusively on out-of-circuit authority instead.

6.   The United States did repeatedly instruct Byers as to Civil Local Rule 10's requirement to respond in numbered paragraphs. ECF Nos. 12, 15, 17, 19. Its letters did not specifically reproduce Federal Rule of Civil Procedure 8’s requirements to admit or deny each allegation in the complaint. But just because the United States instructed Byers on one of these points does not prove that the law requires Byers to do everything that the United States told her she needed to do. For this reason, the Court finds it worthwhile to explain clearly—for both Byers's sake and that of other pro se claimants—why the United States is entitled to insist on adherence to each of the rules it cites.

J.P. Stadtmueller, United States District Judge