One easy trick to avoid the Civil Asset Forfeiture Reform Act! (updated 7/3/15; updated 7/28/15)

Langbord v. U.S. Dep’t of the Treasury, No. 12-4574 (3d Cir. Apr. 17, 2015).

 The reverse of a 1933 double eagle.

The reverse of a 1933 double eagle.

The 1933 double eagle is one of the world’s rarest coins. Although nearly 450,000 of the coins were minted, President Roosevelt removed them from circulation as part of his effort to end the banking crisis. Almost all were melted down into gold bricks, but a small number were smuggled out of the U.S. Mint. 

Joan Langbord says that she unexpectedly found ten double eagles in a safe deposit box she inherited from her father, who may or may not have been involved in a scheme to smuggle them out of the Philadelphia Mint in 1933. Joan and her two sons told the Mint about these ten coins and sought a settlement that would return the coins to the government in exchange for compensation. 

The Mint said it was amenable to discussion, so the Langbords, reserving their rights to the coins, sent them to the government for authentication. But once the government received the coins, it decided to keep them. To try to get their coins back, the Langbords sent the government a “seized asset claim,” the first step in a civil-forfeiture proceeding. The government responded that it didn’t have to institute forfeiture proceedings, because the coins had always belonged to the government. 

The Langbords then brought suit under the Civil Asset Forfeiture Reform Act of 2000, or CAFRA. They argued that if the government wanted to keep the coins, CAFRA required the government either to file a civil-forfeiture complaint within 90 days of receiving the coins, or to return the coins to the Langbords. The government did neither.

According to the government, though, it can avoid CAFRA’s requirements by choosing not to send notice to the interested parties that it intends to pursue forfeiture. This position would seem to allow the government to decide unilaterally when CAFRA’s protections apply: “One Easy Trick to Avoid CAFRA!” 

And so—perhaps predictably—a unanimous Third Circuit panel rejects the government’s argument that it did not violate CAFRA. But the panel divides on the proper remedy for that violation. The majority orders that the coins be returned to the Langbords. A dissent by Judge Sloviter maintains that the remedy for the government’s CAFRA violation isn’t return of the coins, but a prompt forfeiture hearing.

UPDATE: The government has now filed a very fine petition for rehearing en banc, available here. It relies heavily on the fact that the Langbords eventually received a judicial forfeiture proceeding, and a jury found for the government.

UPDATE NO. 2: The Third Circuit has granted the government’s petition for rehearing en banc. I imagine the rehearing will focus not on whether the government violated CAFRA, but on what the remedy for that violation should be.