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United States v. Real Property Located at Incline Village

filed: February 10, 1995.

UNITED STATES OF AMERICA, PLAINTIFF-APPELLEE
v.
REAL PROPERTY LOCATED AT INCLINE VILLAGE, ET AL., DEFENDANTS, BRIAN J. DEGEN AND KARYN DEGEN, CLAIMANTS-APPELLANTS



Appeal from the United States District Court for the District of Nevada. D.C. No. CV-90-00130-ECR. Edward C. Reed, Jr., District Judge. Original Opinion Previously Reported at:,.

Before: Joseph T. Sneed, William A. Norris, and Cynthia Holcomb Hall, Circuit Judges. Opinion by Judge Hall.

Author: Hall

Order AND AMENDED OPINION

HALL, Circuit Judge:

Brian and Karyn Degen appeal from judgments entered against them in the district court on their claims to the defendant properties in this civil forfeiture action. The district court held in a published opinion that Brian Degen (hereinafter referred to as "Brian") was "disentitled" from pursuing his claim to the defendant properties under the fugitive disentitlement doctrine. See, e.g., United States v. $129,374 in United States Currency, 769 F.2d 452 (9th Cir. 1985), cert. denied, 474 U.S. 1086 (1986). Two and one-half years later, the district court entered judgment against Karyn Degen ("Karyn") pursuant to Local Rule 140-6 of the District of Nevada, which provides in part that the failure of a party to file an opposition to a motion "shall constitute a consent to the granting of the motion." The district court entered judgment under this rule when Karyn failed to file a response to the government's summary judgment motion against her, despite receiving several extensions of time and being warned that the court intended to invoke Local Rule 140-6.

We have jurisdiction under 28 U.S.C. § 1291 and now affirm as to both appellants.

FACTS AND PROCEDURAL HISTORY

This civil forfeiture action under 21 U.S.C. §§ 881(a)(6) & (7) involves several million dollars worth of real and personal property, bank accounts, property income, and business interests located in California, Nevada, and Hawaii. The government initiated forfeiture proceedings against a wide array of property in 1989; after the Degens filed claims to a substantial portion of the property, the government severed those properties and made them the subject a second complaint. The complaint alleges that all the defendant properties were the fruits of and/or used to facilitate a massive marijuana trafficking operation Brian had participated in for over twenty years, beginning in the late 1960s. In a separate proceeding, a grand jury in the District of Nevada indicted Brian on a wide array of criminal charges relating to the alleged marijuana smuggling and related money laundering activities.

Brian is a Swiss citizen. Shortly before being indicted, he left the United States and resettled with his family in Switzerland. Under the extradition treaty between Switzerland and the United States, neither country is obligated to extradite its own nationals, so the United States government has been unable to secure his return to this country to face the criminal charges in Nevada. Brian refused to return voluntarily to the United States when he learned of the criminal charges against him. He was apparently arrested in Switzerland in late 1992, although the nature and Disposition of the Swiss charges remain something of a mystery. There is no indication, at any rate, that Brian has at any point during the five years since his indictment made a good faith attempt to submit to the criminal jurisdiction of the Nevada district court.

The government first moved for summary judgment in May 1990. The district court granted the motion with respect to Brian, holding that he was a fugitive from Justice in the related criminal case and therefore was not entitled to contest the civil forfeiture action. The court denied the first motion against Karyn, finding that she had raised triable issues of fact with respect to her innocent owner defense.

The government moved again for summary judgment in December 1992, against Karyn only. The second motion was supported by affidavits of three of Brian's alleged partners in his drug smuggling business, detailing their illegal activities and the sizeable amounts of money Brian earned therefrom over the years. The affiants also alleged that Brian had no significant income from legitimate sources during the long period covered by the criminal indictment. The motion was further supported by documentary evidence and an accompanying authenticating affidavit by the Assistant United States Attorney handling the case.

Under Local Rule 140-4, Karyn initially had fifteen days in which to respond to the summary judgment motion. She obtained numerous extensions of this deadline, claiming that sealing orders obtained by the government made it impossible to gather evidence in support of her claims. After a hearing in February 1993, the district court made all relevant documents available to Karyn to use in preparing her response to the motion, and reopened discovery for sixty days. When Karyn failed to file a response to the summary judgment motion before a final deadline imposed by the district court had passed, the court entered judgment against her pursuant to Local Rule 140-6.

I.

The disentitlement doctrine provides that a fugitive from Justice under certain circumstances loses the right to call upon the resources of the courts. In a leading Supreme Court case on the subject, for example, a criminal defendant fled after being convicted and the Court held that his escape "disentitle[d him] to call upon the resources of the Court for determination of his" direct appeal. Molinaro v. New Jersey, 396 U.S. 365, 366, 24 L. Ed. 2d 586, 90 S. Ct. 498 (1970); compare Ortega-Rodriguez v. United States, 122 L. Ed. 2d 581, 113 S. Ct. 1199, 1209 (1993) ("When a defendant's flight and recapture occur before appeal, the defendant's former fugitive status may well lack the kind of connection to the appellate process that would justify an appellate sanction of dismissal.").

The disentitlement doctrine applies in more contexts than just direct criminal appeals. The circuit courts have extended the doctrine to disentitle fugitives from participating in civil proceedings related to the criminal cases they have fled. See, e.g., Conforte v. Commissioner of Internal Revenue, 692 F.2d 587 (9th Cir. 1982) (taxpayer who fled after conviction on criminal tax evasion charges not entitled to prosecute appeal of tax court determination of tax deficiencies and penalties), stay denied, 459 U.S. 1309 (1983) (Rehnquist, J., in chambers); Doyle v. United States Dep't of Justice, 668 F.2d 1365 (D.C. Cir. 1981) (fugitive not entitled to seek judicial relief under Freedom of Information Act), cert. denied, 455 U.S. 1002, 71 L. Ed. 2d 870, 102 S. Ct. 1636 (1982); Broadway v. City of Montgomery, 530 F.2d 657 (5th Cir. 1976) (court of appeals refused to decide appeal of fugitive seeking damages and injunctive relief for illegal wiretap). More specifically, the disentitlement doctrine has been applied on a regular basis by this court and other circuits in the context of civil forfeiture claims. See, e.g., $129,374, 769 F.2d at 587; United States v. Timbers Preserve, Routt County, Colorado, 999 F.2d 452 (10th Cir. 1993); United States v. Eng, 951 F.2d 461 (2nd Cir. 1991); United States v. One Parcel of Real Estate at 7707 S.W. 74th Lane, Miami, Dade County, Florida, 868 F.2d 1214 (11th Cir. 1989); United States v. Pole No. 3172, Hopkinton, 852 F.2d 636 (1st Cir. 1988).

This court left open in $129,374 the question whether the forfeiture action must be "directly related" to the criminal proceeding from which the claimant has fled, finding it unnecessary to resolve the issue because the "criminal conviction and the property involved in this civil forfeiture proceeding are integrally related parts of the same unlawful drug dealing scheme." 769 F.2d at 588. We need not decide that question either, for the same reason. The government submitted evidence in the present case to establish that all of the properties it seeks to seize were used in connection with or purchased with the proceeds of the various illegal drug transactions which form the basis of Brian's criminal indictment. In addition, the government's "star witness" in the forfeiture case, Ciro Mancuso, and possibly other witnesses, are codefendants in the criminal case. Under these circumstances, the criminal and forfeiture actions are closely enough connected to satisfy any relatedness test.

The present case differs from prior Ninth Circuit applications of the disentitlement doctrine in one respect. In prior cases, the claimants have fled after being convicted in a related criminal proceeding. See, e.g., $129,374, 769 F.2d at 584; Conforte, 692 F.2d at 589. Here, by contrast, Brian has been indicted but not tried or convicted of any criminal charges. This distinction does not, however, compel a finding that the fugitive disentitlement doctrine does not apply. The doctrine rests on the premise that "'the fugitive from Justice has demonstrated such disrespect for the legal processes that he has no right to call upon the court to adjudicate his claim.'" Ortega-Rodriguez, 113 S. Ct. at 1206 (quoting Ali v. Sims, 788 F.2d 954, 959 (3d Cir. 1986)). Although Brian has not been arrested or tried, he has certainly "demonstrated disrespect" for the district court by refusing to submit to its jurisdiction in the criminal action.

The district court correctly concluded in its opinion dismissing Brian's claims in December 1990 that he was at that time a fugitive from Justice because he knew he had been indicted in Nevada but refused to return. 755 F. Supp. at 309-10 (citing United States v. Ballesteros-Cordova, 586 F.2d 1321, 1323 (9th Cir. 1978) and United States v. Gonsalves, 675 F.2d 1050, 1052 (9th Cir.), cert. denied, 459 U.S. 837, 74 L. Ed. 2d 78, 103 S. Ct. 83 (1982)). At that time he was apparently free to return to the United States to contest the forfeiture action, but chose not to do so, presumably to avoid arrest on the criminal charges. Under these circumstances, Brian was a fugitive. See $129,374, 769 F.2d at 587-88 ("It is important to recognize that Lewis has complete control over the protection of his property interests in this forfeiture proceeding; if he finds his interests are sufficiently worth defending, he can terminate his fugitive status and present his own defense."); Gonsalves, 675 F.2d at 1055 (fugitive status continues until accused makes a "good faith effort to surrender").

Brian was apparently arrested by Swiss authorities on November 19, 1992. His counsel strenuously argued in the district court and again in this court that the Swiss arrested Brian at the behest of the United States government, which wished to "transfer" its prosecution to Switzerland because extradition was impossible. While counsel argues ...


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