Late last month, the Federal Circuit issued its opinion in Jenkins v. United States, a takings case we have been following because it attracted an amicus brief. In this case, the Federal Circuit reviewed a district court’s conclusion that it did not have jurisdiction over a due process claim and its grant of the government’s motion for summary judgment on a takings claim related to the seizure and withholding of vehicles as the result of a drug conspiracy investigation. In an opinion authored by Judge Dyk and joined by Judges Lourie and Stark, the Federal Circuit affirmed in part and vacated and remanded in part. In particular, the court held that “there is no police power exception that insulates the United States from takings liability for the period after seized property is no longer needed for criminal proceedings.” This is our opinion summary.
Judge Dyk began by highlighting the factual and procedural background of the case:
At issue in this case are two automobiles owned by Mr. Jenkins. . . [who] transferred title to the cars to his mother, Stephanie Buchanan, a few months after purchasing . . . [them], [but] . . . retained exclusive use of both vehicles.
In . . . spring 2011, the . . . Drug Enforcement Administration (‘DEA’) began investigating Mr. Jenkins because of [drug conspiracy] suspicions. . . . [The] DEA seized the two vehicles, and they were towed to . . . [an] impound lot. The DEA put a ‘hold’ on the vehicles and obtained a search warrant for them. . . . [T]he parties appear to agree that [a ‘hold’] . . . [gave] the government control over the vehicles and prevent[ed] the impound lot from . . . selling the cars without the government’s authorization. . . .
On April 10, 2013, . . . Mr. Jenkins pled guilty to a drug conspiracy charge and . . . was sentenced to 252 months of imprisonment. On October 21, . . . between Mr. Jenkins’ guilty plea and his sentencing, the government contends that the hold on the vehicles was released.
On October 21, the impound lot sent letters to the address on file for Ms. Buchanan notifying her that the vehicles could be ‘reclaim[ed] . . . .’ . . . Ms. Buchanan did not receive the letters because she no longer lived at the address to which they were sent. No letter was addressed to Mr. Jenkins. . . . A magistrate judge found that ‘[i]t is undisputed that the United States . . . did not notify Jenkins where the vehicles were held or when the holds on the vehicles were released.’ . . . However, in the underlying criminal case, Mr. Jenkins wrote that he “was informed to go pick-up both motor vehicles.” . . .
On February 12, 2014, the impound lot sent final notices to Ms. Buchanan [to] the same address . . . stating that “[f]ailure to . . . reclaim the vehicle . . . within 10 days shall be deemed a waiver by you of all right, title, and interest in the vehicle and consent to the sale of the vehicle.” . . . Ms. Buchanan did not receive the letter because she was incarcerated. No letter was sent to Mr. Jenkins. The impound lot [then] sold the [vehicles] . . . .
About three years later, . . . Mr. Jenkins filed a motion in his criminal case for the return of the cars pursuant to Federal Rule of Criminal Procedure 41(g).
Rule 41(g) states: ‘A person aggrieved by an unlawful search and seizure of property or by the deprivation of property may move for the property’s return.’ . . . The United States responded that the cars “are available for return upon arrangement by the defendant and impound lot.” . . . The court dismissed Mr. Jenkins’ motion as moot in light of the government’s indication that his property would be returned.
Soon after, Mr. Jenkins filed a motion for reconsideration again requesting return of the cars or . . . that he receive monetary compensation . . . . Later, . . . Mr. Jenkins filed a motion requesting monetary compensation . . . in excess of $10,000. The court held that it was unable to grant Mr. Jenkins’ request for relief . . . [because] Rule 41 . . . does not allow for monetary damages, and the court lacked jurisdiction under the Tucker Act because the claim was in excess of $10,000.
Mr. Jenkins then filed a civil action under the Little Tucker Act . . . [claiming] that he had suffered a physical taking of his vehicles and request[ing] compensation of $10,000 from the United States under the Fifth Amendment’s takings and due process clauses . . . . The United States moved to dismiss the complaint for lack of jurisdiction. [A] magistrate judge held that the court did not have jurisdiction over [his] . . . due process claim [because] the . . . due process clause is not money mandating. However, the magistrate judge found that it had jurisdiction over Mr. Jenkins’ . . . takings claim. The magistrate judge found . . . that “for the purposes of determining standing, [Mr. Jenkins] has demonstrated . . . a causal connection between his loss of the vehicles and the United States’ conduct.” . . .
. . . The magistrate judge [then] granted the [United States’] motion [for summary judgment] and dismissed Mr. Jenkins’ complaint because “[t]he . . . takings clause does not encompass a claim for just compensation for property seized under governmental police power under the facts of this case.” . . . . [T]he magistrate judge noted that this result was “seemingly inequitable.” . . . Mr. Jenkins appealed . . . .
After providing this background, Judge Dyk analyzed Mr. Jenkins’ takings claim. After noting that “[c]laimants can pursue a takings claim against the United States under the Little Tucker Act when the amount at issue is not in excess of $10,000,” the court concluded “the district court erred” in holding that “there was no takings liability.” Judge Dyk explained that, “[w]hile the United States’ police power may insulate it from liability for an initial seizure, there is no police power exception that insulates the United States from takings liability for the period after seized property is no longer needed for criminal proceedings.” In particular, he explained, the “district court erred in concluding that the legitimacy of the initial seizure precluded liability for failure to return the property.”
Judge Dyk then moved on to what he called “the incomplete record now before us.” He highlighted that “[t]here are four different government actions involved here.” The court held that, other than the first action of “seizing the vehicles and retaining them until . . . they were no longer needed for the criminal investigation,” the other actions require “remand for development of the more complete factual record needed to properly address the legal issues presented.”
Judge Dyk then proceeded to highlight the three other actions that warranted remand. One of them, he noted, is the “alleged government action in retaining the vehicles after they were no longer needed for the criminal investigation and trial.” He then described the second action requiring a remand, where the government released “the hold on the vehicles and allegedly transferr[ed] possession and control of the cars to the impound lot.” Lastly, he noted the final action requiring a remand, occurred when the government sold “the vehicles (through its alleged agent the impound lot) or authoriz[ed] the sale of the vehicles by the impound lot.”
The opinion then shifted to Mr. Jenkins’ due process claim that was “framed on appeal as an illegal exaction claim.” On this issue, the court held that the “district court did not err in dismissing this due process claim for lack of jurisdiction.” On remand, however, the court explained that “Jenkins may seek leave to amend to assert an illegal exaction claim.”
As a result of its analysis, the Federal Circuit vacated the grant of summary judgment and remanded for further proceedings consistent with the court’s opinion. Further, “[a]s to the illegal exaction theory, the jurisdictional dismissal [was] affirmed, but the case [was] remanded to permit Mr. Jenkins to seek leave to amend.”