and Submitted May 9, 2017 Portland, Oregon
from the United States District Court for the District of
Oregon D.C. No. 3:10-cv-00097-MO, Michael W. Mosman, Chief
District Judge, Presiding
de la Puente (argued), Salem, Oregon, for Claimant-Appellant.
Lien (argued) and Annemarie Sgarlata, Assistant United States
Attorneys; Kelly A. Zusman, Appellate Chief; United States
Attorney's Office, Portland, Oregon; for
Before: Jay S. Bybee and Andrew D. Hurwitz, Circuit Judges,
and Jed S. Rakoff, [*] District Judge.
panel reversed the district court's judgment of civil
forfeiture of $11, 500 under 21 U.S.C. § 881(a)(6) from
claimant Charles Guerrero, and remanded for a new trial.
Guerrero, through a friend, tried to post the $11, 500 as
bail for his wife, the government seized the cash. At trial,
the government alleged two theories: that the money was
proceeds from the claimant's drug deals, and that the
claimant used or intended to use the money to facilitate drug
transactions. The jury rejected the first
"proceeds" theory, but found for the government on
the second "facilitation" theory.
panel held that 21 U.S.C. § 881(a)(6) does not authorize
forfeiture based on mere intent to facilitate drug
transactions without proof of some act to effectuate that
intent. The panel held that the district court's
instructions to the jury on the facilitation theory was plain
error because they permitted forfeiture even if the claimant
never took any step to use the money to facilitate drug
transactions. The panel concluded that there was a high
probability that this plain error infected the jury's
Hurwitz concurred without reservation in Parts I- IV of the
panel's opinion, but acquiesced dubitante as to Part
Vconcerning the issue of plain error because he had serious
doubts that the error was plain.
appeal is from a civil forfeiture of $11, 500 under 21 U.S.C.
§ 881(a)(6). The claimant and his wife are heroin
addicts, who have been buying and selling drugs for most of
their lives. When the claimant, through a friend, tried to
post the $11, 500 as bail for his wife, the government seized
the cash. At trial, the government had two theories: first,
that the money was proceeds from the claimant's drug
deals; second, that the claimant used or intended to
use the money to facilitate drug transactions. The jury
rejected the first "proceeds" theory, but found for
the government on the second "facilitation" theory.
hold that the district court's instructions to the jury
on the facilitation theory were plain error because they
permitted forfeiture even if the claimant never took any
step to use the money to facilitate drug transactions.
We cannot overlook the high probability that this plain error
infected the jury's verdict, and we therefore reverse and
remand for a new trial.
and Rosalie Guerrero have been heroin addicts since the late
1980s. Like many serious addicts, the Guerreros
not only bought heroin but also sold it to make enough money
to sustain their destructive habit. Such activities led to
repeated arrests, convictions, and incarceration. This case
arises out of a run-in with the law that resulted in
Rosalie's arrest and detention in the Multnomah County
Detention Center (MCDC) in Portland on charges of possession
of heroin with intent to distribute.
after Rosalie's arrest, Charles drove to Portland from
Salem, where he and Rosalie resided with their friend, Virgil
Wood. Because Charles lacked the necessary identification to
post bail at the MCDC, he asked Wood to tag along. What
Charles did have, however, was some $14, 000, in one hundred
dollar bills, that Charles claimed Rosalie had given him for
safekeeping after obtaining the money from an insurance
settlement and used-car transactions. Because the Guerreros
did not have a bank account, Charles kept the cash hidden
under a carpet in Wood's home until his wife's
arrest. Once in Portland, Charles gave $11, 500 to Wood with
instructions to post bail for Rosalie.
Charles waited outside, Wood went to the MCDC's bail
window and told an officer he was there to post the cash to
free Rosalie. Jail officials ran Wood's records and
discovered that he had a criminal history. Coupled with the
fact that Wood was attempting to bail out a repeat drug
offender with a wad of cash, this prompted jail officials to
call Agent Guy Gino of the federal Department of Homeland
Security. Agent Gino went to the MCDC, asked Wood a few
questions regarding the origin of the $11, 500, and requested
permission to have a drug sniffing dog smell the currency.
(Nikko) alerted to a drug odor on the money. Agent Gino asked
Wood if Nikko could sniff his car. Again, Wood agreed. On the
way to the car, the group encountered Charles, who was
waiting for Woods to come out of the jail. Charles objected
to law enforcement searching the car but Wood nonetheless
permitted Nikko to do so. Nikko alerted to a black bag in the
vehicle-which, the officers later discovered, belonged to
Charles-containing 3.6 grams of heroin. Officers also found
an additional $2, 971 in cash on Charles. Agent Gino arrested
Charles and seized the drugs, the $2, 971 found on Charles,
and the $11, 500 Wood had tried to post as bail.
government then initiated civil in rem forfeiture
proceedings against the seized currency under 21 U.S.C.
§ 881(a)(6). Along with the complaint, the government
submitted Agent Gino's affidavit asserting "probable
cause to believe the $11, 500 in U.S. Currency . . .
represent[ed] the proceeds from the distribution of
controlled substances by [the Guerreros]." Charles filed
a claim to the cash, and this litigation ensued.
district court granted summary judgment in favor of the
government as to the $11, 500, finding that the money was the
"proceeds of illegal drug activity or was used to
facilitate such activity." At a subsequent trial, a jury
found the $2, 971 also forfeitable as drug proceeds. Charles
appealed, and we affirmed the judgment with respect to the
$2, 971, but reversed as to the $11, 500, finding a genuine
issue of material fact as to whether it was legitimately
derived. United States v. $11, 500.00 in U.S.
Currency, 710 F.3d 1006, 1009 (9th Cir. 2013).
trial following our remand, the government again maintained
that the $11, 500 was subject to forfeiture as drug proceeds.
The government painted a grim picture of two unemployed drug
addicts, living off food stamps and sleeping on friends'
couches, who only could have derived the money from one
source: sales of controlled substances, including heroin.
Charles testified and frankly admitted to his criminal
record, addiction, and regular involvement in the drug trade.
But he claimed that the $11, 500 came from an insurance
settlement Rosalie had reached four years before the seizure.
He said she had taken that money and invested it in her own
used-car business. Rosalie corroborated her husband's
testimony, attesting that the $11, 500 came from an insurance
settlement and used-car sales. The government attacked the
Guerreros' testimony, noting, for instance, that four
years had passed since the settlement, that during that time
the Guerreros had few means of support, and that there were
no records of Rosalie's alleged car business.
jury instructions presented alternative legal theories for
the forfeiture. The first was the "proceeds theory,
" on which the government had focused its case, which
authorized forfeiture of any money derived from drug sales.
The second theory-which the district court called the
"facilitation theory"-authorized forfeiture if the
money "was used or was intended to be used to facilitate
illegal drug activity." Although the district court did
not divide the second theory into its two distinct prongs
("used" and "intended to be used"), it
broadly instructed the jury that "'[f]acilitating
property' includes any property that makes the prohibited
conduct 'less difficult or more or less free from
obstruction or hindrance.'" The jury instructions on
the two theories of forfeiture were derived directly from the
controlling statute, § 881(a)(6), and neither party
objected to them.
closing, the government spent the vast majority of its time
on the proceeds theory, attempting to convince the jury that
the money came from heroin sales. But, at a few points, the
government also mentioned the facilitation theory, focusing
almost exclusively on the "intended to be used"
prong. The government argued forcefully that if "Ms.
Guerrero hadn't ended up in jail, " the Guerreros
would have used the $11, 500 "to facilitate drug
trafficking." The only evidence cited in support of that
proposition was that the Guerreros were heavily addicted to
heroin, "using daily, buying and selling on a daily or
weekly basis." In light of such addiction, it was very
likely, the government argued, that the Guerreros would have
used the $11, 500 "to keep their habit going, " and
though on "[t]his particular occasion, [they were] using
[their] money for one thing, . . . what did [they]
intend to use it for?"
closing arguments, the district court issued a special
verdict form almost identical to one jointly submitted by the
parties. The form asked the jury two questions:
1. Has the United States proven by a preponderance of the
evidence that the $11, 500 is the proceeds of an exchange or
exchanges for a controlled substance?
2. Has the United States proven by a preponderance of the
evidence that at least a portion of the $11, 500 was used or
intended to be used to facilitate an exchange or exchanges of
a controlled substance?
deliberations, the jury advised the court that it could not
reach a unanimous verdict. The parties stipulated to a
non-unanimous verdict. Each juror then voted against
the proceeds theory, and six of seven jurors voted in
favor of the facilitation theory. The $11, 500 was thus
forfeited to the government.
subsequently filed a Motion to Amend Judgment under Rule 59,
asserting violations of his Fifth Amendment due process
rights and his Eighth Amendment right to be free from cruel
and unusual punishment. Charles argued that the verdict could
be explained on only one ground: the jury must have found
that the $11, 500 was "clean" but that the
Guerreros nonetheless intended, at some indeterminate point
in time, to use the money to buy drugs. Such a verdict could