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United States v. $525

United States Court of Appeals, Sixth Circuit

August 23, 2017

United States of America, Plaintiff-Appellee,
v.
$525, 695.24, Seized from JP Morgan Chase Bank Investment Account #74068415, et al., Defendants, Osama H. Salouha; HYS Health Mart, Inc., Claimants-Appellants.

          Argued: March 7, 2017

         Appeal from the United States District Court for the Northern District of Ohio at Cleveland. No. 1:13-cv-01455-Donald C. Nugent, District Judge.

         ARGUED:

          Edmund W. Searby, BAKER & HOSTETLER LLP, Cleveland, Ohio, for Appellants.

          Phillip J. Tripi, UNITED STATES ATTORNEY'S OFFICE, Cleveland, Ohio, for Appellee.

         ON BRIEF:

          Edmund W. Searby, BAKER & HOSTETLER LLP, Cleveland, Ohio, for Appellants.

          Phillip J. Tripi, UNITED STATES ATTORNEY'S OFFICE, Cleveland, Ohio, for Appellee.

          Before: CLAY, GIBBONS, and STRANCH, Circuit Judges.

          OPINION

          CLAY, Circuit Judge.

         In this civil forfeiture action, the United States filed a complaint against numerous bank accounts, as well as three cars and various real properties, asserting that the named properties were either used in the transportation and sale of controlled substances, were used or intended to be used to facilitate drug trafficking, or were involved in money laundering. The government thus asserted that the properties were subject to forfeiture pursuant to 21 U.S.C. § 881(a)(4), (a)(6), and (a)(7), as well as 18 U.S.C. § 981. Claimant Osama Salouha, on behalf of himself and his business, HYS Health Mart, Inc. (collectively "Claimants"), filed a verified claim to eighteen of the assets; however, the government moved to strike that claim based on the fugitive disentitlement statute, 28 U.S.C. § 2466. The district court granted the government's motion to strike Claimants' claim and subsequently ordered the relevant accounts forfeited. Claimants now appeal the order of forfeiture, the decision by the district court striking their claims, and the denial of their motion for reconsideration. The government filed a motion to dismiss the appeal based on an untimely notice of appeal. For the reasons set forth below, we DENY the motion to dismiss the appeal and AFFIRM the district court's judgment.

         BACKGROUND

         On June 3, 2013, the government filed a civil in rem forfeiture complaint against twenty bank accounts, two real properties, three vehicles, and $91, 500 in United States currency. This civil forfeiture action is related to the government's investigation into Osama Salouha and Sbeih Sbeih, the claimant in a related case. Salouha is alleged to have illegally sold prescription drugs, including oxycodone, oxymorphone, and hydrocodone, through the two pharmacies he owns in Ohio, in violation of 21 U.S.C. § 841. Salouha and Sbeih are alleged to have laundered the receipts from Salouha's illegal drug sales through their personal and business accounts, in violation of 18 U.S.C. § 1956. The government sought forfeiture pursuant to 21 U.S.C. § 881(a)(4), (a)(6), and (a)(7), as well as 18 U.S.C. § 981, as the bank accounts contained proceeds from drug trafficking activities, were used to facilitate drug trafficking, or were involved in money laundering.

         On August 7, 2013, Salouha filed a verified claim to eighteen of the assets. Salouha also filed a verified claim asserting an interest in two of the bank accounts on behalf of his pharmacy, HYS Health Mart, Inc. The case was then stayed for a year because of the related criminal investigation. Salouha was indicted on June 3, 2014, on forty-eight counts of, inter alia, conspiracy to distribute controlled substances, distribution of controlled substances, false statements, conspiracy to commit money laundering, conspiracy to defraud the Internal Revenue Service, making and subscribing false income tax returns, and structuring transactions to evade reporting requirements.[1] When Salouha failed to appear for his arraignment on his criminal charges, the district court issued a warrant for his arrest.

         Meanwhile, the district court lifted the stay on the civil forfeiture case and scheduled a status conference for June 24, 2014. Claimants' counsel sought the district court's permission for Salouha to attend the conference via telephone, as Salouha, along with his pregnant wife and four children, had moved to Gaza after the seizure of the family's assets. Salouha alleged that the travel restrictions imposed on the Gaza strip made it difficult for him and his wife to return. The district court denied the motion, and Salouha did not attend the conference.

         On September 18, 2014, the government filed a motion to strike Claimants' claims pursuant to the fugitive disentitlement statute, which Claimants opposed. The district court did not immediately rule on the motion. Instead, the district court waited to see whether the Salouhas were able to re-enter the country with the help of the U.S. State Department. On March 24, 2015, the government refiled its motion to strike Claimants' claims pursuant to the fugitive disentitlement statute, asserting that Salouha was now out of Gaza and free to return to the United States, but had still failed to do so. Although Claimants requested until April 23, 2015, to file a response, Claimants ultimately decided not to respond to the motion. The district court granted the government's motion to strike Claimants' claims on May 12, 2015. The accompanying judgment only indicated that Claimants' claims were stricken; it did not order the forfeiture of any property.

         Seven months later, on December 17, 2015, the government filed a Stipulated Settlement Agreement and Decree of Forfeiture, asserting that the government had reached a settlement with Salouha's wife, Samah Salouha, whereby Mrs. Salouha withdrew her claims to all the assets except the house and the car, in exchange for the government's dismissal of those assets from the complaint. The filing included a section ordering the forfeiture of the other sixteen assets. The district court signed and approved the order. The final properties involved in the case, which had been claimed by the Sbeihs, were ordered forfeited the following month, on January 14, 2016.

         On April 1, 2016, Claimants moved to vacate the judgment and to have their property returned or, in the alternative, to clarify the judgment entered on May 12, 2015. The government moved to strike the motion. The district court, on May 12, 2016, denied Claimants' motion insofar as it sought reconsideration of Salouha's status as a disentitled fugitive, and struck the motion insofar as it sought reconsideration of the court's forfeiture order. Claimants filed an appeal the next day, which challenged the original disentitlement order and accompanying judgment, the signed order of forfeiture, and the denial of the motion to vacate the judgment.

         DISCUSSION

         On appeal, Claimants argue that the district court erred in finding that Salouha was a fugitive, meaning he was improperly prevented from defending against the civil forfeiture. Claimants also argue that the district court erred in ordering forfeiture given that the government never filed a motion for default judgment with respect to the relevant properties.[2] In addition to arguing the merits of the arguments raised, the government filed a motion to dismiss the appeal, contending that we lack jurisdiction because Claimants' notice of appeal was untimely. We address each of these issues below, beginning with the jurisdictional question.

         A. Jurisdiction

         "It is well-established that the federal courts are under an independent obligation to examine their own jurisdiction." Kusens v. Pascal Co., Inc., 448 F.3d 349, 359 (6th Cir. 2006) (citing FW/PBS, Inc. v. City of Dallas, 493 U.S. 215, 231 (1990)). This Court "review[s] de novo the existence of subject-matter jurisdiction." Watson v. Cartee, 817 F.3d 299, 302 (6th Cir. 2016) (citing Ammex, Inc. v. Cox, 351 F.3d 697, 702 (6th Cir. 2003)).

         The district court had jurisdiction over this action pursuant to 28 U.S.C. § 1345, which provides that "district courts shall have original jurisdiction of all civil actions, suits or proceedings commenced by the United States." The district court also had jurisdiction pursuant to 28 U.S.C. § 1355, as this is an action for forfeiture.

         Claimants are permitted to file an appeal as of right pursuant to 28 U.S.C. § 1291, and such an appeal "'may be taken only by filing a notice of appeal with the district clerk within the time allowed by Rule 4' of the Federal Rules of Appellate Procedure." Bonner v. Perry, 564 F.3d 424, 427 (6th Cir. 2009) (quoting Fed. R. App. P. 3(a)(1)). When one of the parties in a civil case is the United States, "the notice of appeal may be filed by any party within 60 days after entry of the judgment or order appealed." Fed. R. App. P. 4(a)(1)(B). But such an appeal may only be taken from final decisions of a district court. Bonner, 564 F.3d at 426-27. "A judgment is final for purposes of appeal when it terminates all issues presented in the litigation on the merits and leaves nothing to be done except to enforce by execution what has been determined." Donovan v. Hayden, Stone, Inc., 434 F.2d 619, 620 (6th Cir. 1970) (citations omitted). However, an order that "does not dispose of all parties and all claims is generally not immediately appealable unless the district court issues" a certificate under Federal Rule of Civil Procedure 54(b). Bonner, 564 F.3d at 427.

         The government originally raised the issue of this Court's jurisdiction to hear the appeal in a motion to dismiss the appeal as untimely. In both the motion to dismiss and in the merits brief, the government argues that Claimants' notice of appeal was untimely as to the original opinion and order striking Claimants' claims based on Salouha's status as a fugitive, the accompanying judgment, and the district court's order approving the forfeiture of the assets claimed by Claimants. As the government notes, the district court originally struck Claimants' claims on May 12, 2015. A separate judgment was entered the same day. Furthermore, the Decree of Forfeiture, as signed by the district court, was filed on December 17, 2015. Claimants did not file their notice of appeal until after the district court denied their motion to vacate the forfeiture, which the district court decided on May 12, 2016. ...


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