No. 95-1134 IN THE SUPREME COURT OF THE UNITED STATES OCTOBER TERM, 1995 ESPERANZA RODRIGUEZ DE CASTRO, PETITIONER v. UNITED STATES OF AMERICA ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION DREW S. DAYS, III Solicitor General JOHN C. KEENEY Acting Assistant Attorney General JOSEPH C. WYDERKO Attorney Department of Justice Washington, D.C. 20530 (202) 514-2217 ---------------------------------------- Page Break ---------------------------------------- QUESTION PRESENTED Whether the district court had in rem jurisdiction in a civil forfeiture action over funds in accounts at financial institutions in London, England, when those funds had been seized by British authorities at the request of the United States. (I) ---------------------------------------- Page Break ---------------------------------------- TABLE OF CONTENTS Opinions below . . . . 1 Jurisdiction . . . . 1 Statement . . . . 2 Argument . . . . 6 Conclusion . . . . 9 TABLE OF AUTHORITIES Cases: Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1974) . . . . 7 Bennington v. Fourth National Bank, 243 U.S. 269 (1917) . . . . 7 Republic National Bank v. United States, 5(16 U.S. 80(1992) . . . . 7 Sale v. Haitian Centers Council, Inc., 113 S.Ct. 2549 (1993) . . . . 8 The Brig Ann, 13 U.S. (9 Cranch) 289 (1815) . . . . 7 United States v. Curtiss-Wright Export Corp., 299 U.S. 304 (1936) . . . . 8 United States v. James Daniel Good Real Property, 114 S. Ct. 492 (1993) . . . . 7 United States v. One Assortment of 89 Firearms, 465 U.S. 354 (1984) . . . . 7 United States v. United States Coin & Currency, 401 Us. 715 (1971) . . . . 7 (III) ---------------------------------------- Page Break ---------------------------------------- IV Treaty and statutes: Agreement Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning the Investigation of Drug Trafficking Offenses and the Seizure and Forfeit- ture of Proceeds and Instrumentality's of Drug Trafficking, Feb. 9, 1988, 1989 WL 428726 . . . . 2 18 U.S.C. 981(a)(1)(A) . . . . 2, 5 21 U.S.C. 881(a)(6) . . . . 2,5 28 U.S.C. 1355 . . . . 4,5,7 46 U.S.C. App. 1903(c)(1) . . . . 8 Drug Trafficking Offenses Act, 1986, ch. 32 (Eng.) . . . . 3 ---------------------------------------- Page Break ---------------------------------------- In the Supreme Court of the United States OCTOBER TERM, 1995 No. 95-1134 ESPERANZA RODRIGUEZ DE CASTRO, PETITIONER v. UNITED STATES OF AMERICA ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT BRIEF FOR THE UNITED STATES IN OPPOSITION OPINIONS BELOW The opinion of the court of appeals (Pet. App. 1a- 14a) is reported at 63 F.3d 148. The opinion of the district court (Pet. App. 1c-10c) is reported at 856 F. Supp. 759. JURISDICTION The judgment of the court of appeals was entered on August 10, 1995. A petition for rehearing was denied on October 19, 1995. Pet. App. 1b. The petition for a writ of certiorari was filed on January 16, 1996. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). (1) ---------------------------------------- Page Break ---------------------------------------- 2 In July 1993, the United States filed an in rem action in the United States District Court for the Eastern District of New York seeking civil forteiture pursuant to 18 U.S.C. 981 (a)(1)(A) and 21 U.S.C. 881 (a)(6) of funds in seven bank accounts at financial institutions in London, England, in the names of peti- tioner and her late husband. The complaint alleged that the funds in the bank accounts were the proceeds of an extensive international drug-trafficking and money-laundering enterprise operated by the Cali Santa Cruz Londono. The district court denied petitioner's motion to dismiss the forfeiture action for lack of in rem jurisdiction and later entered an order forfeiting the funds. Pet. App. 1c-10c; Pet. C.A. Br. App. A14-A15. The court of appeals affirmed. Pet. App. 1a-14a. 1. In July 1990, the United States asked British authorities to restrain funds in seven London bank accounts controlled by Londono in light of the anticipated federal criminal prosecution of Londono and his associates in the United States. The request was based on a 1988 mutual assistance treaty between the United States and the United Kingdom and the ___________________(footnotes) 1 Agreement Between the Government of the United States of America and the Government of the United Kingdom of Great Britain and Northern Ireland Concerning the Investigation of Drug Trafficking Offences and the Seizure and forfeiture of Proceeds and Instrumentalities of Drug Trafficking, Feb. 9, 1988, 1989 WL 428726 (Treaty). ---------------------------------------- Page Break ---------------------------------------- 3 applicable British forfeiture statute.2 On July 30, 1990, the British authorities obtained an order re- straining the bank accounts from the Queen's Bench Division of the High Court of Justice. Pet. App. 3a-4a; Gov't C.A. Br. 10. In October 1990, a criminal complaint was filed in the United States District Court for the Eastern District of New York charging Londono and three others with conspiring to distribute cocaine and conspiring to launder drug proceeds. Londono, how- ever, remained a fugitive, living, it was believed, in Columbia. In 1991, extradition arrangements between the United States and Colombia ended, making it unlikely that Londono would be tried in this country on the federal charges. Pet. App. 4a, 3c-4c; Gov't C.A. Br. 10. 2. On July 16, 1993, the government filed the civil forfeiture complaint in this case in the Eastern District of New York. On July 19, 1993, pursuant to a magistrate judge's order, the clerk of the court issued an arrest warrant in rem commanding the U.S. Mar- shals Service to attach the funds in the seven bank accounts. At the request of the U.S. Marshals Ser- vice, a British constable in London attached the funds on September 8 and 16, 1993, by serving the complaint and warrant on the banks holding the funds. Pet. App. 4a; Gov't C.A. Br. 10-11. On October 1, 1993, petitioner, a foreign national residing in Colombia, filed a notice of claim to the funds in the seven bank accounts. One month later, she moved to dismiss the forfeiture complaint on the ___________________(footnotes) 2 Drug Trafficking Offenses Act, 1986, ch. 32 (Eng.) (Des- ignated Countries and Territories), reproduced in Pet. C.A. Br. App. A50-A82. ---------------------------------------- Page Break ---------------------------------------- 4 ground that the district court lacked in rem juris- diction over the funds. Petitioner asserted that the district court lacked actual or constructive control over the funds in the London bank accounts because any forfeited funds would be deposited into the gen- eral fund of the United Kingdom pursuant to the 1988 treaty and British law. Pet. App. 4a-5a; Gov't C.A. Br. 4. At the same time, petitioner and her daughter, who was Londono's former wife, initiated an action in the Crown Office Division of the High Court of Justice in Great Britain to discharge the 1990 restraining order issued by the Queen's Bench Division. They argued, among other things, that the restraining order could not remain in place pending a civil (as distinguished from a criminal) forfeiture proceeding in this coun- try. Pet. App. 5a; Gov't C.A. Br. 4. The district court deferred ruling on petitioner's motion to dismiss the forfeiture complaint pending resolution of the British action. In the meantime, the court issued _. a preliminary injunction prohibiting petitioner from transferring the funds, except for the release of $100,000 for petitioner's legal expenses. Pet. App. 5a; Gov't C.A. Br. 4-5. On March 18, 1994, the British High Court upheld the 1990 restraining order. Pet. App. 5a; Gov't C.A. Br. 5. The High Court concluded that, "although now based on the civil proceedings in New York, the order will remain in force." Pet. App. 4c. 3. The district court denied petitioner's motion to dismiss the forfeiture action for lack of in rem juris- diction. Pet. App. 1c-10c. The court determined that it had subject-matter jurisdiction over the forfeiture action under 28 U.S.C. 1355, and that venue was prop- er under the same statute. Id. at 5c-6c, 9c. It further ---------------------------------------- Page Break ---------------------------------------- 5 ruled that "[i]n rem jurisdiction over property in a foreign country exists if there is a seizure of the property that gives the court constructive control over the property, and if the seizure satisfies the traditional concerns of jurisdiction, namely enforce- ability of the judgment and reasonable probability of notice to the parties interested in the property." Id. at 9c. Applying that test, the court held that the "[s]eizure of the accounts in Great Britain with the assistance of the British government gave [the] court constructive control over the defendant funds." Ibid. It also found that the High Court's decision in 1994 continuing the restraining order "gives assurance that a judgment of forfeiture issued by this court would be enforced in England." Id. at 9c-10c. After her motion to dismiss was denied, petitioner failed to answer interrogatories and to produce docu- ments as required by a court order. The government moved for summary judgment on the ground that petitioner was collaterally estopped by a related action from contesting the issues of probable cause and innocent ownership of the funds, Petitioner did not oppose the government's motion. On May 25, 1994, the district court granted summary judgment for the government and ordered forfeiture of the funds under 18 U.S.C 981(a)(1)(A) and 21 U.S.C. 881(a)(6). Pet. App. 5a-6a; Gov't C.A. Br. 5-7. 4. The court of appeals affirmed. Pet. App. 1a-14a. It rejected the government's argument that, as a result of 1992 amendments to 28 U.S.C. 1355, the dis- trict court did not need actual or constructive control of the res to assert in rem jurisdiction. Id. at 9a-11a. The court of appeals held, however, that the district court had constructive control over the funds in the London bank accounts. Id. at 11a-14a. The court of ---------------------------------------- Page Break ---------------------------------------- 6 appeals explained that, although the United Kingdom did not have a "binding obligation" to turn over the funds to the United States, "the district court cor- rectly determined that it had constructive control of the funds by virtue of the demonstrated cooperation of the British government." Id. at 13a. The court of appeals agreed with the district court that "the United Kingdom acted essentially as an agent of the United States for purposes of this forfeiture action" because "[e]very action of the British law enforce- ment officials has been in direct response to requests from federal authorities." Ibid. The court of appeals noted that, "in at least two other separate pro- ceedings, the United Kingdom has returned funds to the United States after registering and enforcing decrees of forfeiture entered by a district. court ." Ibid. The court declined to "delineate the precise scope of what will constitute constructive control in future cases." Id. at 14a. Instead, it concluded that in this case "the government has met its burden of demonstrating that the British government will turn over at least a portion of the seized funds to the United States, thereby vesting the district court with the requisite constructive control over the funds." Ibid. ARGUMENT Petitioner contends (Pet. 10-16) that the district court lacked in rem jurisdiction over the funds in the London bank accounts because it lacked constructive control of the res. The court of appeals correctly re- jected that contention, and its decision does not con- flict with any decision of this Court or any other court of appeals. Indeed, petitioner does not cite any other published decision by a federal court addressing ---------------------------------------- Page Break ---------------------------------------- 7 what constitutes constructive control of area located in a foreign country under 28 U.S.C. 1355. Moreover, the court of appeals expressly refrained from making any broad pronouncements on that subject. Further review is therefore unwarranted. This Court has long recognized that jurisdiction in civil forfeiture proceedings, as in all in rem, actions, is based on the court's control of the res. See, e.g., United States v. One Assortment of 89 Firearms, 465 U.S. 354, 363 (1984); Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 682-684 (1974); United Slates v. United States Coin & Currency, 401 U.S. 715, 719-720 (1971); Pennington v. Fourth National Bank, 243 U.S. 269 (1917). The Court has made clear that either actual or constructive control of the res suffices to confer jurisdiction. See United States V. James Daniel Good Real Property, 114 S. Ct. 492,503 (1993) (citing The Brig Ann, 13 U.S. (9 Cranch) 289, 291 (1815)); Republic National Bank v. United States, 506 U.S. 80, 87 (1992). The Court has explained that the res "is actually within [the court's] possession, when it is submitted to the process of the court; it is constructively so, when, by a seizure, it is held, to ascertain and enforce a right or forfeiture which can alone be decided by a judicial decree in rem." The Brig Ann, 13 U.S. (9 Cranch) at 291. The court of appeals correctly held in this case that the district court had constructive control over the funds that the government sought to forfeit. Pet. App. 13a-14a. The British authorities, at the request of the United States, have seized the funds and are holding them for disposition in light of the outcome of this case, They obtained a restraining order from the Queen's Bench Division preventing transfer of the funds; they attached the funds by serving the ---------------------------------------- Page Break ---------------------------------------- 8 complaint and the arrest warrant in rem issued by the court in this case on the banks holding the funds; and the Crown Office Division upheld the restraining order "based on the civil proceedings in New York." Id. at 4c. The district court properly found that those circumstances provide "assurance that [the] judg- ment of forfeiture issued [in this case] would be en- forced in England." Id. at 9c-10c. Petitioner contends (Pet. 10, 15) that the court of appeals erred by relying on the government's repre- sentation on appeal that, in two prior cases, the United Kingdom has given funds in that country to the United States under forfeiture orders entered in this country. Petitioner argues (Pet, 15) that the government should have obtained "written assurance from the British government" that it would hand over the seized funds. Petitioner's argument lacks merit. She cites no legal support for restricting the manner in which the government proves that a foreign nation intends to cooperate in a domestic forfeiture proceeding, and the argument cannot be squared with the Executive Branch's discretion in conducting foreign affairs. See Sale v. Haitian Centers Council, Inc., 113 S. Ct. 2549, 2567 (1993) (citing United States v. Curtiss- Wright Export Corp., 299 U.S. 304 (1936)); cf. 46 U.S.C. App. 1903(c)(1) (in prosecution for maritime drug trafficking, government may prove foreign country's consent to United States' exercise of juris- diction over vessel "by certification of the Secretary of State or the Secretary's designee"). Nor does peti- tioner suggest that the government's representation to the court of appeals was false or misleading she does not assert, for example, that there were other cases in which the British government has declined ---------------------------------------- Page Break ---------------------------------------- 9 to hand over funds forfeited under an order entered in this country. Finally, even if the court of appeals erred by relying on the government's representation on appeal, the error was harmless, because the dis- trict court did not rely on any such representation in holding that it had constructive control over the res. Petitioner also contends (Pet. 16) that the district court lacked in rem jurisdiction over any portion of the forfeited funds that the United Kingdom retains. That contention does not warrant further review. Petitioner does not challenge the court of appeals' determination that the amount of funds to be turned over "will depend on negotiations between the two nations?' Pet. App. 13a. Thus, it is not clear what, if any, portion of the funds the British government will retain. CONCLUSION The petition for a writ of certiorari should be denied. Respectfully submitted. DREW S. DAYS, III Solicitor General JOHN C. KEENEY Acting Assistant Attorney JOSEPH C. WYDERKO Attorney MARCH 1996