Background
Younes Nasri, a Canadian citizen residing in Dubai, allegedly led Phantom Secure, a Canada-based company that sold encrypted Blackberry phones to criminals worldwide, including in the Southern District of California. After indicting Nasri on racketeering and drug-conspiracy charges, the United States filed a civil forfeiture action targeting more than $1.2 million held in Nasri’s personal account and an account belonging to Golden Castle Technology Limited at Bendura Bank AG in Liechtenstein.
Nasri filed a verified innocent-ownership claim. After settlement negotiations failed, he did not appear as ordered or surrender in the criminal case. The government moved under the fugitive disentitlement statute, 28 U.S.C. § 2466, to strike his claim. The district court concluded that it had in rem jurisdiction over the funds and granted the motion without deciding whether it had actual or constructive control over them.
The Court’s Holding
The Ninth Circuit held that the Fifth Amendment’s Due Process Clause requires a federal court to have actual or constructive control over property before exercising in rem jurisdiction in a civil forfeiture action. Although 28 U.S.C. § 1355(b)(2) permits a forfeiture action involving property in a foreign country to be brought in specified federal districts, the panel concluded that the statute does not eliminate this constitutional prerequisite.
The panel also held that neither forfeiture nor the party-presentation principle prevented review because Nasri had challenged the court’s jurisdiction and the constitutional adequacy of its connection to the assets. Because the district court expressly declined to determine whether it controlled or constructively controlled the Liechtenstein funds, the panel vacated the order striking Nasri’s claim and remanded for that determination. It did not itself decide whether Liechtenstein’s restraint of the accounts or other cooperation established constructive control.
Key Takeaways
- A federal court must possess actual or constructive control over foreign property before exercising in rem jurisdiction over it in a civil forfeiture case.
- Section 1355(b)(2)’s authorization to bring forfeiture actions involving foreign property does not, by itself, satisfy the Fifth Amendment’s jurisdictional requirements.
- The decision vacated the fugitive-disentitlement ruling and required the district court to determine on remand whether it had actual or constructive control over the Liechtenstein accounts.
Why It Matters
The decision limits the government’s ability in the Ninth Circuit to obtain civil forfeiture judgments against assets located abroad based solely on Section 1355’s filing provisions. Courts must first determine that the United States has sufficient actual or constructive control over the property, potentially through foreign-government cooperation or assurances.
Judge Bybee concurred that proceeding without the property also raised Article III justiciability concerns, while Judge Desai wrote separately that the control requirement addressed those concerns. Judge Bennett dissented, arguing that Section 1355 displaced the traditional control requirement and that the majority’s rule conflicted with precedent and interfered with federal foreign-affairs and law-enforcement judgments.