Crime & Federalism

In a civil forfeiture action, the government presented substantial evidence that the property fraduently conveyed. The property owner did not present any evidence to counter this assertion. Does the property owner have Article III standing to challenge a civil forfeiture?

No - A property owner does not have Article III standing to challenge a civil forfeiture unless he can raise a trial issue of material fact that he rightfully has a possessory interest. United States v. Markarian, No. 03-15396, (9th Cir., Oct. 1, 2004).

For Judges Noonon Clifton, Judge Fogel wrote:

Article III standing must be determined as a threshold matter in every federal case. In a forfeiture action, this determination turns upon whether the claimant has a sufficient interest in the property to create a case or controversy. The claimant’s burden under Article III is not a heavy one; the claimant need demonstrate only a colorable interest in the property, for example, by showing actual possession, control, title, or financial stake. Id. Ownership interest is determined under the law of the state in which the interest arose — here, California.

The government presented significant evidence that the property was fraudulently conveyed to the Markarians. The Markarians did not present any evidence to rebut the government's arguments: This was a fatal mistake.

Because the government met its initial burden of presenting evidence from which a trier of fact could conclude that the transfer to the Markarians was fraudulent, the burden shifted to the Markarians to demonstrate a triable issue of material fact as to the fraudulent nature of the transfer. The Markarians, however, failed to oppose the government’s motion. Accordingly, the district court properly concluded as a matter of law that the transfer of the defendant property was fraudulent,5 and that as a result the Markarians lacked Article III standing to contest the forfeiture action. [A] claimant need demonstrate only a colorable interest in the defendant property in order to establish Article III standing. Had the Markarians mounted any opposition to the government’s motion for summary judgment, it is entirely possible that they could have met their threshold burden under Article III. However, because the government presented evidence that the transfer of the property was fraudulent under state law, and the Markarians failed to present any evidence whatsoever to the contrary, the district court properly concluded that there were no triable issues of material fact with respect to that issue.