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United States v. $102

United States District Court, D. Nevada

September 26, 2014

$102, 836.00 IN UNITED STATES CURRENCY, Defendant. SANTIAGO CRUZ, Claimant.


LARRY R. HICKS, District Judge.

This is a civil forfeiture action. Before the Court is the United States' Renewed Motion for Summary Judgment. Doc. #33.[1] Claimant Santiago Cruz's ("Cruz") filed an Opposition (Doc. #34), to which the United States did not reply.

I. Facts and Procedural History

On July 12, 2010, Cruz was driving westbound on Interstate 80 near Sparks, Nevada when Nevada Highway Patrol ("NHP") Trooper Jason Phillips[2] ("Phillips") pulled him over for speeding and for an obtrusively-placed Global Positioning System ("GPS") device mounted on Cruz's windshield.[3] Doc. #16 (Phillips Decl.), ¶4. Thereafter, Phillips approached Cruz's vehicle to request identification. Id. at ¶5. Cruz produced his Nevada driver's license. Id. Phillips advised Cruz of the reason for the traffic stop and further informed Cruz that it was not his intention to issue a citation. Id. at ¶6. Cruz then volunteered that the car was a rental, and produced the rental agreement, which stated that the rental period for the vehicle began on June 28, 2010, in Las Vegas, Nevada, and was due back to Las Vegas one week earlier, on July 5, 2012. Id. at ¶9. Cruz explained that he was on his way to Fairfield, California from Battle Mountain, Nevada and had extended the rental term over the phone. Id. at ¶9; Doc. #22-1 (Cruz Decl.), ¶4. Cruz indicated that he was picking his mother up in Fairfield for a friend's funeral back in Battle Mountain. Doc. #22-1, ¶6.

Upon approaching the vehicle, Phillips recognized the odor of marijuana and the strong odor of air freshener coming from the interior of the vehicle.[4] Doc. #16, ¶7. Phillips also observed Cruz to exhibit signs of nervousness and anxiety as he was looking for the rental agreement and repositioning the GPS device. Id. at ¶8. Phillips then asked Cruz to exit the vehicle while the records check was being processed. Id. at ¶10. As Cruz was exiting the vehicle, Phillips detected the odor of marijuana coming from Cruz's person.[5] Id. At that point, Cruz informed Phillips that he had a prior drug-related arrest. Id. at ¶11. The records check subsequently confirmed a prior drug-related arrest and conviction. Id. At some point during the traffic stop, Washoe County Deputy Sheriff Zirkle ("Zirkle") arrived to assist Phillips. Id. at ¶12.

Suspecting criminal drug activity, Phillips contacted NHP Trooper Erik Lee ("Lee") to inquire as to the availability of a canine unit. Id. at ¶13. Thereafter, Lee arrived with a trained drug-detection canine, "Petey, " who, upon deployment, positively alerted to the trunk and the rear passenger door of Cruz's vehicle, indicating the presence of the odor of illegal drugs in the right rear passenger section of the vehicle.[6] Doc. #17 (Lee Decl.), ¶¶4, 6. Based on the totality of the circumstances, Phillips, Lee, and Zirkle conducted a search of the vehicle. Id. at ¶7; Doc. #16, ¶14. The search yielded discovery of two duffel bags containing cash, one in the trunk and one on the rear passenger seat of the car. Doc. #16, ¶15. The currency, which was found in several bundles bound together with rubber bands, totaled $102, 836.00. Id. at ¶¶16-17. The search also yielded discovery of a "pay-owe" sheet or price list showing various sources and quantities of marijuana or amounts owed to various persons for various types of drugs[7] ( id. at ¶18, Ex. 10), two pre-paid cell phones ( id. at ¶18, Ex. 13), a package of resealable plastic "Ziploc"-type bags ( id. at ¶18, Ex. 11), and various receipts showing travel and purchases in multiple locations over the course of the previous two weeks ( id. at ¶19, Exs. 3, 4, 5, 6, 7, 8, 14, 15).

Upon being presented with the results of the search and upon being questioned about the source of the currency, Cruz stated that he had sold a business and had also earned money through wages and gaming. Id. at ¶20. Officer Lee inquired as to how much money was in the bag, and Cruz replied that he had "no idea" how much money he had in the vehicle, but estimated that there was approximately $1, 000.00 in the black duffel bag located on the rear passenger seat of the vehicle. Doc. #17, ¶11. The black duffel bag was later determined to contain approximately $40, 000.00. Id. Cruz, however, testified that he didn't tell the officer anything about the money. Doc. #22-1, ¶11.

On November 1, 2010, the United States filed a Complaint in Forfeiture against the Defendant Currency. Doc. #1. Thereafter, Cruz filed a Notice of Claim of Ownership (Doc. #5) and Answer (Doc. #7). On October 29, 2012, the United States filed a Motion for Summary Judgment. Doc. #15. On July 2, 2013, the Court entered an Order denying the United States' Motion for Summary Judgment, finding that genuine issues of material fact as to whether Phillips had developed the requisite reasonable suspicion to detain Cruz for "20 to 30 minutes" in anticipation of the canine unit precluded summary judgment. Doc. #24. Thereafter, Cruz filed a Motion to Suppress. Doc. #27. The Court ultimately denied Cruz's Motion, concluding that the 20 to 30 minutes during which Cruz was detained for further investigation was supported by reasonable suspicion and, therefore, did not violate the Fourth Amendment. Doc. #32. On March 26, 2014, the United States renewed its Motion for Summary Judgment. Doc. #33.

II. Legal Standard

Summary judgment is appropriate only when the pleadings, depositions, answers to interrogatories, affidavits or declarations, stipulations, admissions, and other materials in the record show that "there is no genuine issue as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); Cnty. of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).

The moving party bears the initial burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is "sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001). On an issue as to which the non-moving party has the burden of proof, however, the moving party can prevail merely by demonstrating that there is an absence of evidence to support an essential element of the non-moving party's case. Celotex, 477 U.S. at 323.

To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A "material fact" is a fact "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the party's position is insufficient to establish a genuine dispute; there must be evidence on which a jury could reasonably find for the party. See id. at 252.

III. Discussion

Under the Civil Asset Forfeiture Reform Act of 2000 ("CAFRA"), the government has the burden to prove by a preponderance of the evidence that the defendant property is subject to forfeiture. 18 U.S.C. § 983(c); United States v. $80, 180.00 in U.S. Currency, 303 F.3d 1182, 1184 (9th Cir. 2002). When "the [g]overnment's theory of forfeiture is that the property was used to commit or facilitate the commission of a criminal offense, or was involved in the commission of a criminal offense, the [g]overnment shall establish that there was a substantial connection between the property and the offense." 18 U.S.C. § 983(c)(3). The determination of whether the government has met its burden of proof is based on the aggregate of facts including circumstantial facts. United States v. $42, 500.00 in U.S. Currency, 283 F.3d 977, 980 (9th Cir. 2002); see also United States v. $30, 060.00 in U.S. Currency, 39 F.3d 1039, 1041 (9th Cir. 1994). The burden then shifts to the claimant to prove by a preponderance of the evidence that the claimant is an innocent owner of the property. 18 U.S.C. § 983(d). Specifically, the claimant has the burden to "prove the money had an independent source and had not been used illegally." United States v. $22, 474.00 in U.S. Currency, 246 F.3d 1212, 1217 (9th Cir. 2001) (citing United States v. $215, 300.00 in U.S. Currency, 882 F.2d 417, 420 (9th Cir. 1989)).

Here, the United States' is pursuing forfeiture under 21 U.S.C. § 881(a)(6), which subjects currency to forfeiture if: (1) it were "intended to be furnished... in exchange for a controlled substance, " (2) it were "proceeds traceable to such an exchange, " or (3) it were "intended to be used to facilitate a violation of [the Controlled Substances Act, 21 U.S.C. § 801 et seq. ]" Therefore, the United States must establish that a "substantial connection" exists between the currency and an illicit transaction by a preponderance of the evidence. Contrary to the United States' assertion that the only genuine issue of material fact which earlier precluded summary judgment has now been ...

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