Opinions of the United
2000 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-6-2000

United States v. Bein
Precedential or Non-Precedential:

Docket 99-3822




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Filed June 5, 2000

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 99-3822

UNITED STATES OF AMERICA

v.

ESTHER BEIN and WILLIAM BEIN,
       Appellants.

On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. Crim. No. 94-214)
District Judge: Hon. Donetta W. Ambrose

Argued: May 9, 2000

Before: GREENBERG, McKEE, and GARTH,
Circuit Judges

(Filed: June 5, 2000)

       Stanley W. Greenfield (argued)
       Daniel J. Kraut
       Greenfield, Brewer & Kay
       Greenfield Court
       1035 Fifth Avenue
       Pittsburgh, PA 15219

        Attorneys for Appellants
       Harry Litman
       United States Attorney
       Bonnie R. Schlueter (argued)
       Assistant United States Attorney
       633 U.S. Post Office & Cthse.
       Pittsburgh, PA 15219

        Attorney for Appellee

OPINION OF THE COURT

GREENBERG, Circuit Judge.

I. INTRODUCTION

This matter is before this court on an appeal by Esther
and William Bein from an order of the district court entered
August 18, 1999, denying their motion to amend or alter an
order entered July 9, 1999, denying in part their motion
pursuant to Rule 41(e) of the Federal Rules of Criminal
Procedure for return of property. The Beins, alleging the
Government wrongfully had destroyed or failed to return
their property, filed their Rule 41(e) motion to recover
compensatory damages or the return of the property. The
district court granted the motion in part, awarding damages
in the amount of $2,450, and ordering the Government to
return a cart in its possession. The court, however, denied
the Beins' motion with respect to their claim for losses of
other property. The Beins appeal, seeking additional
damages.

Although the Government has not appealed, it asserts, as
it did in the district court, that the court did not have
jurisdiction to entertain the Beins' Rule 41(e) motion to the
extent that it sought compensatory damages. Because we
find that sovereign immunity bars a claim against the
Government seeking money damages under Rule 41(e), we
will vacate the order of the district court entered July 9,
1999, insofar as it awarded damages. We do not, however,
disturb the order with respect to the return of the cart.
Inasmuch as the district court did not have jurisdiction to
award damages, we do not consider on the merits the

                                2
arguments the Beins raise as they advance them only in an
attempt to recover additional damages. Thus, we will affirm
the order of August 18, 1999, denying the Beins' motion to
amend the order of July 9, 1999.

This matter arises out of the investigation and arrest of
the Beins and their subsequent prosecution in the district
court. On October 3, 1994, agents of the Federal Bureau of
Investigation arrested the Beins who then were charged
with conspiracy and interstate transportation of stolen
merchandise. Following the filing of a superseding
indictment, the Beins pleaded guilty to conspiracy to
commit interstate transportation of stolen property and
conspiracy to launder money.

At the time of the Beins' arrest, the Government executed
search warrants at their home and at their wholesale
toiletries and pharmaceutical products business. 1 The
Government maintained an inventory of all items that were
seized. See app. at 9-25. At the Beins' sentencing hearing,
the court directed the Government to return all non-
contraband items to the Beins.

There is no dispute that the Government returned certain
items to the Beins. Nevertheless, the Beins filed their
motion pursuant to Fed. R. Civ. P. 41(e) as they asserted
that the Government did not return many items seized and
instead destroyed them. Consequently, in their Rule 41(e)
motion the Beins largely sought to recover monetary
damages to compensate them for their loss. Indeed, the
Beins acknowledge that the Government told them before
they filed their Rule 41(e) motion that the property it had
not returned had been destroyed.

The Beins alleged in particular that the Government
improperly had destroyed (1) documentation of goods sold
to certain entities, (2) gemachs,2 (3) certain warehouse
_________________________________________________________________

1. FBI, Internal Revenue Service agents and a number of local police
officers who were deputized as United States Marshals executed the
warrants as part of an investigation called Operation "Fence Fry." The
Pittsburgh Police Department placed the goods seized from the Beins in
a forfeiture lot it maintained. The IRS stored all documents seized.

2. A gemach is a promissory note representing a loan made to a
charitable organization. The loan is repaid at an agreed upon date by

                                3
merchandise, (4) six carts, (5) photographs, (6) keys, (7)
memorabilia, (8) two briefcases, (9) documents related to a
particular lawsuit, (10) computer programs, (11) an airline
ticket, (12) certain important papers and invitations, (13) a
fax machine, and (14) documents relating to the repair of a
property in Canada the Beins owned. As we have indicated,
the district court determined that the Government retained
in its possession one of the six carts for which the Beins
sought damages and ordered its return, a matter not in
issue on this appeal. The court further determined that the
Government wrongfully had destroyed five carts, the keys,
a fax machine and wedding and bar mitzvah invitations.
Inamsuch as the Government could not return these items,
the court awarded the Beins $2,450 in damages to
compensate them for their loss. The district court found,
however, that the Beins had not established that the
Government took possession of the remaining property or
had not presented adequate proof of damages for its loss.
The Beins have appealed from the order of the district court
to the extent it denied their Rule 41(e) motion seeking
damages for this remaining property. We have jurisdiction
over their appeal pursuant to 28 U.S.C. S 1291.

II. DISCUSSION

It is well settled that the Government may seize evidence
for use in investigation and trial, but that it must return
the property once the criminal proceedings have concluded,
unless it is contraband or subject to forfeiture. See United
States v. Chambers, 

, 376 (3d Cir. 1999); see
also United States v. Premises Known as 608 Taylor Ave.,
Apartment 302, 

, 1302 (3d Cir. 1978); United
States v. Wilson, 

, 1103 (D.C. Cir. 1976)
(district court has both the jurisdiction and duty to return
property against which no government claim lies). A person
aggrieved by the deprivation of property may file a motion
under Rule 41(e) to request its return. See Chambers, 192
_________________________________________________________________

either the borrower or a third party making payment on behalf of the
borrower. The gemach is considered under Orthodox Jewish Law to be
a high form of charity because the repayment relieves the recipient of
any feeling of obligation to the donor. See App. at 

; Government of Virgin Islands v. Edwards, 

, 273 (3d Cir. 1990). A district court has
jurisdiction to entertain a motion for return of property
even after the termination of criminal proceedings against
the defendant and such an action is treated as a civil
proceeding for equitable relief. See United States v. McGlory,

, 670 (3d Cir. 2000) (en banc); 

(citing United States v. Martinson, 

(9th Cir. 1987); Rufu v. United States, 

, 65
(2d Cir. 1994); Thompson v. Covington, 

, 975
(8th Cir. 1995)). Further, even if it is alleged that the
property the movant seeks to have returned is no longer
within the Government's possession, the district court has
jurisdiction to determine whether such property had been
in its possession and whether it wrongfully disposed of
such property. See 

.

The Beins filed their Rule 41(e) motion primarily seeking
not the return of their property, but rather compensatory
damages for property they alleged the Government
wrongfully destroyed. The Government asserts the district
court did not have subject matter jurisdiction to address
such a claim under Rule 41(e).3 For the reasons set forth
_________________________________________________________________

3. The Government also asserts that the Beins' appeal was not timely.
See Appellee Br. at 1-3. The Government argues that, because Rule 41(e)
is a rule of criminal procedure, the time for appeal should be ten days,
as opposed to the 60 days that would be allowed for a civil appeal in a
case in which it is a party. See 

by the Government, those
courts that have addressed the issue have held that because Rule 41(e)
motions filed after the conclusion of criminal proceedings are treated as
civil proceedings in equity, the time period forfiling a notice of appeal
in
civil cases should be applied for the sake of simplicity and clarity. See

(citing United States v. Madden, 

, 39 n.1 (10th Cir. 1996);
United States v. Garcia, 

, 18 n.2 (4th Cir. 1995); Hunt v. U.S.
Dep't of Justice, 

(5th Cir. 1993); United States v. Taylor, 

, 403 (7th Cir. 1992); 

). While we
have not addressed this issue, we do not find any compelling reason to
part from the consensus that appears to have arisen among those courts
that have done so. Accordingly, we find that the time for appeal
applicable to civil actions should apply in the context of an appeal from
a post-conviction decision on a Rule 41(e) motion and thus, as the Beins
appealed within 60 days of August 18, 1999, their appeal is timely. Of
course, we do not consider whether a Rule 41(e) motion made during the
pendency of the criminal proceedings should be treated as a civil
proceeding for purposes of calculating the time for appeal as that issue
is not before us.

                               5
below, we find that, as a result of the Government's
immunity from suit, the district court lacked subject matter
jurisdiction over the Beins' claims for monetary damages.

While the Government has not appealed from the order
entered in the district court, it asserts that, based upon its
sovereign immunity, the district court did not have
jurisdiction to enter a claim for monetary damages as relief
on a Rule 41(e) motion. See Appellee Br. at 4-6. But the
Government need not have appealed formally from the
order of the district court for us to consider this issue as a
claim of sovereign immunity advances a jurisdictional bar
which a party may raise at any time, even on appeal, and
which the court may raise sua sponte. See Brown v.
Secretary of the Army, 

, 648 (D.C. Cir. 1996);
see also United States v. United States Fidelity & Guaranty
Co., 

, 514, 

, 657 (1940) ("Consent
alone gives jurisdiction to adjudicate against a sovereign.
Absent that consent, the attempted exercise of judicial
power is void.").

It is a fundamental principle of sovereign immunity that
federal courts do not have jurisdiction over suits against
the United States unless Congress, via a statute, expressly
and unequivocally waives the United States' immunity to
suit. See United States v. Mitchell, 

, 212, 

, 2965 (1983). Moreover, when the Government
does consent to be sued, "the terms of [the] waiver of
sovereign immunity define the extent of the court's
jurisdiction." United States v. Mottaz, 

, 841,

, 2229 (1986). "[W]aivers of the
Government's sovereign immunity, to be effective, must be
`unequivocally expressed,' " and any such waiver must be
construed strictly in favor of the sovereign. United States v.
Nordic Village, Inc., 

, 33-34, 

,
1014-15 (1992).

As we have indicated, we are concerned with Fed. R.
Crim. P. 41(e) which reads:

       Motion for Return of Property. A person aggrieved by
       an unlawful search and seizure or by the deprivation of
       property may move the district court for the district in
       which the property was seized for the return of the

                               6
       property on the ground that such person is entitled to
       lawful possession of the property. The court shall
       receive evidence on any issue of fact necessary to the
       decision of the motion. If the motion is granted, the
       property shall be returned to the movant, although
       reasonable conditions may be imposed to protect
       access and use of the property in subsequent
       proceedings. If a motion for return of property is made
       or comes on for hearing in the district of trial after an
       indictment or information is filed, it shall be treated
       also as a motion to suppress under Rule 12.

Inasmuch as Rule 41(e) motions are treated as civil
equitable actions, see 

, in light of its equitable
powers the district court concluded that it had ancillary
jurisdiction to award damages to the Beins and against the
United States.

Unquestionably the district court had reason to believe
that it could award damages as some courts have
suggested that a court under Rule 41(e) "has power to
award damages incident to the complaint." United States v.

- 68; see also United States v.
Kanasco, Ltd., 

, 210 n.1 (4th Cir. 1997); Mora
v. United States, 

, 159-60 (2d Cir. 1992).
Other courts, however, have disagreed with this approach.
See, e.g., Pena v. United States, 

, 986 (5th Cir.
1998); United States v. Chambers, __ F. Supp.2d __, 

, at *3-6 (D.N.J. Apr. 5, 2000). We seem never
to have made a definitive ruling on the point and thus we
make our own analysis of the issue.

Sovereign immunity protects the Government from suit
except insofar as it has waived that immunity. A waiver
must be expressed unequivocally in statutory text and will
not be implied. See Lane v. Pena, 

, 192, 

, 2096 (1996) (citations omitted). Rule 41(e),
however, does not expressly authorize an award of
monetary damages and thus a court's jurisdiction to award
damages pursuant to that rule is questionable.

Notwithstanding the absence of an express provision in
Rule 41(e) authorizing an award of damages, the Court of
Appeals for the Ninth Circuit has stated that this omission

                                7
is not controlling with respect to the availability of damages
under that rule. Thus, in Martinson it indicated:

       When a citizen has invoked the jurisdiction of a court
       by moving for return of his property, we do not think
       that the government should be able to destroy
       jurisdiction by its own conduct. The government
       should not at one stroke be able to deprive a citizen of
       a remedy and render powerless the court that could
       grant the remedy.

. The court feared that if it
allowed the Government to moot a motion for return of
property by giving the property away or destroying it, it
would be encouraging the United States to undertake
unilateral actions which would have the effect of
circumventing the judicial process. See 

respect
this policy argument, it overlooks the fact that a
determination of whether Rule 41(e) authorizes an award of
damages raises a question not of mootness, but of
jurisdiction. Moreover, application of sovereign immunity,
by its very nature, will leave a person wronged by
Government conduct without recourse.

Indeed, a more recent decision of the Court of Appeals for
the Ninth Circuit appears to be contrary to its reasoning in
Martinson to the extent it held that a district court has
jurisdiction to award monetary damages despite the fact
that Rule 41(e) does not expressly provide for such an
award. In United States v. Woodley, the court considered
the question of whether a court could impose a monetary
sanction on the United States under the Federal Rules of
Criminal Procedure. See 

(9th Cir. 1993). Fed. R.
Crim. P. 16(d)(2) provides a court with the authority to
"prescribe such terms and conditions as are just" to remedy
a violation of a discovery order. See 

(quoting Rule
16(d)(2)). The court found that because Rule 16(d)(2) did
not include independent authority for a monetary sanction
it would decline to recognize that the rule waived sovereign
immunity. Accordingly, the sanction could not be imposed.
See 

It seems to us that this conclusion is at
odds with the result in Martinson. Moreover, Rule 16(d)(2)
is broader than Rule 41(e) in that Rule 16(d)(2) allows a
court to prescribe such terms and conditions as are just,

                               8
whereas Rule 41(e), even though proceedings under it are
treated as general equitable actions, only provides for one
express remedy -- the return of property.

After careful analysis we reject the cases which allow an
award of damages in a proceeding under Rule 41(e) as we
conclude that a Federal Rule of Criminal Procedure that
does not expressly provide for an award of monetary
damages does not waive sovereign immunity.4 We find the
reasoning of the Court of Appeals for the Fifth Circuit in
Pena and of the United States District Court for the District
of New Jersey in Chambers to be persuasive on this point.

The court in Pena reasoned as follows:

       Pena has named the United States as the defendant in
       his case. The principle of sovereign immunity protects
       the federal government from suit except insofar as that
       immunity is waived. A waiver must be unequivocally
       expressed in statutory text and will not be implied. See
       Lane v. Pena, 

, 192, 

,
       2096, 

(1996) (citations omitted). Rule
       41(e) makes no provision for monetary damages, and
       we will not read into the statute a waiver of the federal
       government's immunity from such damages. Numerous
       Supreme Court decisions hold that courts should
       construe statutes against waiver unless Congress has
       explicitly provided for it. See, e.g., 

(refusing to allow monetary damages under
       S 504(a) of the Rehabilitation Act of 1973, 29 U.S.C.
       S 791 et seq., where the relevant statutory provisions
       failed to provide the `clarity of expression necessary to
       establish a waiver of the Government's sovereign
       immunity against monetary damages'); United States v.
       Nordic Village, Inc., 

, 33-34, 

, 1014-15, 

(1992) (holding that
_________________________________________________________________

4. The case law suggests that sovereign immunity may be waived only by
a clear statutory expression of waiver; legislative history will not
suffice
to operate as a waiver. See United States v. Nordic Village, 

, 112 S.Ct. at 1016. Given our holding in this case, however, we
need not address the broader question of whether rules of procedure,
standing alone, can be found to constitute a waiver of sovereign
immunity.

                               9
       although the contemporary S 106(c) of the Bankruptcy
       Code waived sovereign immunity, `it fail[ed] to establish
       unambiguously that the waiver extend[ed] to monetary
       claims'). However compelling his case, Pena may not
       maintain a suit against the United States for monetary
       damages under Rule 41(e).

. The district court in Chambers
agreed. See Chambers, 

at *3.

In this case the district court appeared to have assumed,
and the Beins have argued, that because the courts have
construed Rule 41(e) to grant a district court the power to
award certain equitable relief, the court had jurisdiction to
award complete relief, which in certain circumstances could
include an award of monetary damages. While this line of
reasoning may have merit in analogous situations with
respect to a non-governmental entity, it does not properly
address the sovereign immunity claim raised by the
Government. In fact, the Supreme Court has found that the
waiver of sovereign immunity does not extend beyond the
express terms of the waiver. See Department of the Army v.
Blue Fox, Inc., 

, 

(1999).

In Blue Fox the respondent sued the Army under section
702 of the Administrative Procedures Act, which provides in
relevant part:

       A person suffering legal wrong because of agency
       action, or adversely affected or aggrieved by agency
       action within the meaning of a relevant statute, is
       entitled to judicial review thereof. An action in a court
       of the United States seeking relief other than money
       damages and stating a claim that an agency or an
       officer or employee thereof acted or failed to act in an
       official capacity or under color of legal authority shall
       not be dismissed nor relief therein be denied on the
       ground that it is against the United States or that the
       United States is an indispensable party.

119 S.Ct. at 691 (citing 5 U.S.C. S 702). The
respondent asked the Court to find that the provision
waiving sovereign immunity from actions seeking relief
other than money damages would allow it to seek a lien on
funds held by the United States. See 

court of appeals in Blue Fox had read an earlier
decision of the Supreme Court as standing for the
proposition that section 702's reference to "other than
money damages" constituted a waiver of sovereign
immunity as to all actions equitable in nature. See 

119 S.Ct. at 691. The Supreme Court disagreed,
finding that the waiver of sovereign immunity must be
found in the language of the statute, and thus proceeded to
determine whether the relief sought by respondents
constituted money damages. See 

119 S.Ct. at
691-92. The Court held that the imposition of the equitable
lien sought by respondent was in fact a claim for money
damages outside the waiver of sovereign immunity. See 

119 S.Ct. at 692.

In keeping with the reasoning of Blue Fox, to the extent
a court may read Rule 41(e) as a waiver of sovereign
immunity, it must limit the waiver to the express terms of
the rule. We reiterate that Rule 41(e) provides for one
specific remedy -- the return of property. Although courts
treat a motion pursuant to Rule 41(e) as a civil equitable
action, such a characterization cannot serve as the basis
for subjecting the United States to all forms of equitable
relief. A court must strictly construe the scope of a waiver
of sovereign immunity in favor of the sovereign. See Blue
Fox, 525 U.S. at 

. The interpretation
of Rule 41(e) urged by the Beins would apply a liberal
construction of the scope of a waiver of sovereign immunity.
Consequently, we conclude that the district court erred
when it exercised subject matter jurisdiction over the Beins'
claims for monetary damages. Therefore we will vacate the
order of the district court of July 9, 1999, to the extent it
awarded the Beins monetary damages and we will remand
the matter to the district court to dismiss the Rule 41(e)
motion, to the extent that it sought monetary damages for
lack of subject matter jurisdiction.

We believe our conclusion is buttressed by a review of the
specific instance under the Federal Tort Claim Act ("FTCA")
in which the Government has waived sovereign immunity in
actions seeking damages for loss or damage to property. We
refer to that waiver not to suggest that any particular
remedy is, or was, available in this case, or would be

                               11
available in future cases involving seizure of evidence in
criminal matters, but rather to illustrate the manner in
which a Rule 41(e) action for damages could undermine the
limitations set forth on the waiver of sovereign immunity in
property loss or damages cases.

While the FTCA waives sovereign immunity for certain
claims for money damages, that waiver is subject to several
limitations. See, e.g., 28 U.S.C. S 1346(b)(1) (providing
jurisdiction in the district courts for claims for money
damages resulting from injury to, or loss of, property
caused by the negligence of a Government employee). As
particularly germane here, the waiver in section 1346(b)
does not extend to any claim "arising in respect . . . of the
detention of goods or merchandise by any officer of customs
or excise or any other law-enforcement officer." 28 U.S.C.
S 2680(c).

The courts have interpreted section 2680(c) to bar claims
premised upon essentially any injury to property sustained
during its detention. See Kosak v. United States , 

, 853-55, 

, 1523-24 (1984). Further, the
courts usually broadly interpret the term law-enforcement
official within 2680(c). See United States v. 2,116 Boxes of
Boned Beef, 

, 1490-91 (10th Cir. 1984)
(USDA inspectors included); see also Halverson v. United
States, 

, 655-56 (5th Cir. 1992) (INS border
patrol agents included); Schlaebitz v. United States Dep't. of
Justice, 

, 194 (11th Cir. 1991) (federal
Marshals included); Ysasi v. Rivkind, 

, 1525
(Fed. Cir. 1988) (INS border patrol agents included);
Formula One Motors, Ltd. v. United States, 

,
823 (2nd Cir. 1985) (DEA agents included); United States v.
Lockheed L-188 Aircraft, 

, 397 (9th Cir. 1979)
(FAA employees included); but see Bazuaye v. United
States, 

(D.C. Cir. 1996) (postal employees not
included); Kurinsky v. United States, 

, 598 (6th
Cir. 1994) (section 2680(c) is limited to detention of goods
by law enforcement officers acting in tax or customs
capacity).

If a party were to proceed under the FTCA on a
negligence theory, then his or her claim for money damages
might be barred because the lost or damaged property was

                                12
detained by law-enforcement officials. Indeed, if the Beins
had proceeded under the FTCA their action might have
been barred on this very basis. See 28 U.S.C. S 2680(c).
Thus, granting an award of damages under Rule 41(e) could
allow a party to make a recovery pursuant to a procedural
rule even though he or she would be barred from such
recovery under a statute passed by Congress. Such a result
would be incongruous as it would be directly contrary to
the intent of Congress.

Finally, we make reference to two of our recent cases.
First we observe that our holding today is not inconsistent
with our opinion in United States v. Chambers , 

. In Chambers, we were presented with the question of
what role the district court should play when addressing a
Rule 41(e) motion in which the Government asserts it no
longer has possession of the property at issue. We
concluded that in such a case

       the District Court must determine, in fact, whether the
       government retains possession of the property; if it
       finds that the government no longer possesses the
       property, the District Court must determine what
       happened to the property. The District Court must hold
       an evidentiary hearing on any disputed issue of fact
       necessary to the resolution of the motion.

       If the District Court concludes that the government's
       actions . . . were not proper, it shall determine what
       remedies are available.

(citations omitted). We did not
consider there whether such available remedies would
include an award of monetary damages. See 

never mentioned sovereign immunity in our opinion.
Second, we note that in our en banc opinion in United
States v. One Toshiba Color Television, Nos. 98-3578/3579,

, at *10 (3d Cir. May 24, 2000), we
indicated that even if an owner of property obtains an order
vacating an order for forfeiture "that [success] does not
mean that he is entitled to any monetary relief or relief in
the form of a transfer of property." We, however, did not
make a ruling on the point as we merely indicated that
under Fed. R. Civ. P. 60(b) such relief might not be

                               13
available. Again, as in Chambers, we did not discuss
sovereign immunity. Thus, our opinion in One Toshiba left
open the issue we decide here.

III. CONCLUSION

For the reasons set forth above, we find that the district
court did not have jurisdiction over the Beins' Rule 41(e)
motion to the extent it sought to recover damages for
property the Government allegedly destroyed. Accordingly,
we will vacate the order of the district court entered July 9,
1999, and remand the matter to the district court for
dismissal for lack of jurisdiction insofar as the motion
sought and the order awarded monetary damages. Thus,
the order of July 9, 1999, shall stand only with respect to
the order to the Government to return the one cart in its
possession. The order of August 18, 1999, will be affirmed.
We will remand the case to the district court for entry of an
order in accordance with this opinion.

A True Copy:
Teste:

       Clerk of the United States Court of Appeals
       for the Third Circuit

                               14