State v. Terry

 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 91-524


 State of Vermont                             Supreme Court

                                              On Appeal from
      v.                                      District Court of Vermont,
                                              Unit No. 2, Chittenden Circuit

 David S. Terry                               September Term, 1992



 Matthew I. Katz, J.

 Thomas M. Kelley, Drug Prosecutor, State's Attorneys and Sheriffs
    Department, Montpelier, for plaintiff-appellee

 David J. Williams of Sleigh & Williams, St. Johnsbury, for defendant-
    appellant

 Jeffrey L. Amestoy, Attorney General, and Susan R. Harritt, Assistant
    Attorney General, Montpelier, for amicus curiae Office of Attorney
    General



 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.



      GIBSON, J.    Defendant appeals a decision of the Vermont District
 Court denying his motion for return of property brought pursuant to
 V.R.Cr.P. 41(e) and 57.  He requests return of $2,820 that was seized from
 his person by Vermont state law enforcement officers at the time of his
 arrest but was subsequently the subject of a federal forfeiture proceeding.
 We affirm.
      On March 2, 1989, the Vermont State Police executed a search warrant at
 the home of defendant and his girlfriend.  At this time, defendant was
 arrested for simple assault and was searched incident to the arrest.
 Officers seized three-quarters of an ounce of marijuana and $2,820 found on
 his person.  On April 3, 1989, defendant was arraigned on charges stemming
 from this incident.
      State officials turned the $2,820 over to the federal Drug Enforcement
 Administration (DEA) on August 2, 1989.  Defendant was duly notified of the
 seizure and the commencement of federal forfeiture proceedings brought
 pursuant to 21 U.S.C. { 881.  He was informed that he could petition the DEA
 for return of the property or contest the forfeiture in federal court.
 Defendant filed a petition for remission or mitigation of forfeiture with
 the DEA.  The property was declared forfeited on November 22, 1989, and
 defendant was notified by letter dated November 24, 1989, that his petition
 had been denied.  No further action was taken in the federal proceedings.
      On March 27, 1991, defendant pled nolo contendere in state court to a
 misdemeanor charge of possession of marijuana.  He was fined and received a
 suspended sentence.  On September 4, 1991, defendant filed a motion for
 return of the $2,820 in the Vermont District Court pursuant to V.R.Cr.P.
 41(e) and 57.  The court denied the motion without written decision on the
 grounds that it lacked jurisdiction over the res.
      On appeal, defendant relies on the rule of prior exclusive juris-
 diction enunciated in Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189 (1935), wherein the Court stated that the first court to exercise in rem
 jurisdiction over a res "may maintain and exercise that jurisdiction to the
 exclusion of the other."  Id. at 195.  According to defendant, the Vermont
 District Court was the first court to exercise in rem jurisdiction over the
 $2,820; thus, he argues that the court retains jurisdiction to consider his
 current motion for return of property.  Defendant relies on two theories to
 support his assertion that the Vermont District Court assumed in rem
 jurisdiction over the $2,820.  He first argues that the court acquired in
 rem jurisdiction when the property was seized in executing a search
 warrant. (FN1) We find no support for this assertion.
      In Vermont, under 18 V.S.A. {{ 4241-4248, state officials may file a
 petition in state court to commence a civil forfeiture proceeding.  Like its
 federal counterpart, 21 U.S.C. { 881, a state forfeiture action is an in rem
 action against the property.  See United States v. One 1985 Cadillac
 Seville, 866 F.2d 1142, 1145 (9th Cir. 1989) ("A federal forfeiture action
 under 21 U.S.C. { 881 is an in rem action.").  Here, however, no civil
 complaint was filed in state court against the $2,820 at issue.  Thus, the
 state court did not obtain exclusive jurisdiction over the money.  See id.
 at 1146 (federal court is not precluded from exercising jurisdiction in
 proceeding to forfeit automobile first seized by state authorities and then
 by DEA because it was not subject of state forfeiture proceeding or order);
 cf. United States v. One 1979 Chevrolet C-20 Van, 924 F.2d 120, 123 (7th
 Cir. 1991) (where state court had previously asserted jurisdiction in state
 forfeiture proceeding, federal court lacked jurisdiction to entertain
 federal forfeiture complaint).
      In contrast to civil forfeiture proceedings, criminal proceedings are
 in personam.  While the State may seize property as evidence for a criminal
 proceeding, neither the seizure nor the filing of an inventory in state
 criminal court establishes an in rem proceeding against the property.  In
 United States v. One 1986 Chevrolet Van, 927 F.2d 39 (1st Cir. 1991), the
 defendant challenged the federal district court's jurisdiction to consider a
 complaint for forfeiture on grounds that the state court had prior exclusive
 jurisdiction.  The court of appeals ruled, however, that the state had
 never instituted a forfeiture action and that "the only action in state
 court was the in personam criminal action against the Claimant for
 possession of marijuana."  Id. at 44.  Because the federal district court
 was the only court attempting to exercise in rem jurisdiction, the appeals
 court held that it had properly considered the complaint.  The court noted
 that "this conclusion is not altered by the fact that the car was seized
 following a search conducted pursuant to a state search warrant."  Id. at
 45.
      Similarly, in the present case, no state forfeiture complaint was
 filed.  Although the money was seized by state officials while executing a
 state search warrant, this does not establish in rem jurisdiction in state
 court.  No state court exercised in rem jurisdiction over the $2,820 in this
 case; thus, the rule of prior exclusive jurisdiction is not applicable.
      Second, defendant argues that the Vermont District Court acquired in
 rem jurisdiction because a motion for return of property under V.R.Cr.P.
 41(e) is an in rem proceeding.  He relies on United States v. $2,542 in U.S.
 Currency, 754 F. Supp. 378, 383 (D. Vt. 1990), in which the court held that
 the federal district court lacked jurisdiction to consider a complaint for
 civil forfeiture where the property at issue was the subject of a pending
 Rule 41(e) motion for return of property in state court.  The federal court
 held that the Rule 41(e) proceeding was quasi in rem, thus invoking prior
 exclusive jurisdiction in the state court.  Id. at 383.  This case lends no
 support to defendant's position in the present case where the Rule 41(e)
 motion was filed almost two years after completion of the federal
 forfeiture proceeding.
      Defendant relies primarily on two cases to support his position.  In
 United States v. Wright, 610 F.2d 930 (D.C. Cir. 1979), after criminal
 charges were dismissed by the federal district court, appellants filed a
 motion for return of property that had been seized pursuant to a federal
 search warrant.  The government argued that the federal district court
 lacked jurisdiction to order return of the money.  The appellate court
 disagreed, stating that the federal district court had post-conviction
 jurisdiction to order return of property seized in executing a federal
 warrant "'against which no Government claim lies.'"  Id. at 934 (quoting
 United States v. Wilson, 540 F.2d 1100, 1103 (D.C. Cir. 1976)).  As the
 Wright court noted, the general rule is that such property should be
 returned provided it is not stolen, contraband, or otherwise forfeitable,
 and provided it is not needed as evidence.  Id. at 939.
      Wright is not applicable in the instant case.  It declares only that a
 criminal court has post-conviction jurisdiction to return property not
 otherwise forfeitable.  As the property at issue in this case is forfeit-
 able -- indeed, it has been forfeited -- Wright does not support defendant's
 position.
      Defendant also relies on Garmire v. Red Lake, 265 So. 2d 2 (Fla. 1972),
 in which the court held that the criminal court retains jurisdiction to
 determine disposition of property confiscated and held for evidentiary
 purposes in matters pending before the criminal court.  Id. at 4.  Defense
 counsel attempted to recover legal fees by filing a replevin complaint
 against property that was being held as evidence in a pending criminal case.
 The court reasoned that it would seriously hamper the criminal process if
 evidence seized for criminal trial could be subject to recovery proceedings
 in civil courts.  Id. at 4-5.  Garmire is not on point, however, because, in
 contrast to the present case, the property at issue was not subject to a
 forfeiture proceeding, and it was evidence in a pending criminal case.
      The instant case is more like United States v. Hernandez, 911 F.2d 981
 (5th Cir. 1990), where the defendant sought return of his jewelry after his
 conviction.  The jewelry had been the subject of a federal administrative
 forfeiture proceeding pursuant to 18 U.S.C. { 881.  Defendant had received
 notice of the forfeiture proceedings and had filed a petition for remission
 or mitigation.  The DEA denied his petition.  He then filed a Rule 41(e)
 motion in federal district court for return of the property.  On appeal, the
 court held that the district court had no jurisdiction to entertain the
 motion and noted that the proper place to contest the seizure was in the
 forfeiture proceeding.  Id. at 983; see also United States v. Price, 914 F.2d 1507, 1508 (D.C. Cir. 1990) ("once the Government initiates an
 administrative forfeiture proceeding and the property is not the subject of
 an ongoing criminal proceeding, the District Court has no jurisdiction to
 resolve the issue of return of property"); Shaw v. United States, 891 F.2d 602, 604 (6th Cir. 1989) (claimant who failed to pursue remedy in forfeiture
 proceeding was properly denied return of property under Rule 41(e)); United
 States v. Castro, 883 F.2d 1018, 1019 (11th Cir. 1989) ("It is well-settled
 that the proper method for recovery of property which has been subject to
 civil forfeiture is not the filing of a Rule 41(e) Motion, but filing a
 claim in the civil forfeiture action.").
      We hold that the Vermont District Court lacks jurisdiction over this
 post-conviction Rule 41(e) motion for return of property because the
 property was previously the subject of a federal forfeiture proceeding.  If
 property is not being held as evidence in a pending criminal case, and
 forfeiture proceedings have commenced, the proper forum to contest the
 seizure is in the forfeiture proceeding.
      Affirmed.



                                    FOR THE COURT:



                                    __________________________________
                                    Associate Justice





FN1.    The State maintains that the $2,820 was not seized pursuant to the
 warrant but rather in a search incident to arrest.  For purposes of this
 appeal, we find this distinction irrelevant.

-------------------------------------------------------------------------------
                                Concurring



 NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
 as well as formal revision before publication in the Vermont Reports.
 Readers are requested to notify the Reporter of Decisions, Vermont Supreme
 Court, 109 State Street, Montpelier, Vermont 05609-0801 of any errors in
 order that corrections may be made before this opinion goes to press.


                                 No. 91-524


 State of Vermont                             Supreme Court

                                              On Appeal from
      v.                                      District Court of Vermont,
                                              Unit No. 2, Chittenden Circuit

 David S. Terry                               September Term, 1992



 Matthew I. Katz, J.

 Thomas M. Kelley, Drug Prosecutor, State's Attorneys and Sheriffs
    Department, Montpelier, for plaintiff=appellee

 David J. Williams of Sleigh & Williams, St. Johnsbury, for defendant-
    appellant

 Jeffrey L. Amestoy, Attorney General, and Susan R. Harritt, Assistant
    Attorney General, Montpelier, for amicus curiae Office of Attorney
    General



 PRESENT:  Allen, C.J., Gibson, Dooley, Morse and Johnson, JJ.


      Johnson, J., concurring.  I concur with the result in this case but
 write to emphasize what the decision does and does not mean.  Our decision
 today forecloses state jurisdiction over a defendant's seized property only
 when federal forfeiture precedes a state in rem or quasi in rem proceeding
 involving the property.  It does not mean that our state courts are always
 powerless to prevent the initiation of federal forfeiture proceedings.
 Rather, for a state court to properly take jurisdiction, a defendant must
 act in a timely fashion to bring a state in rem action.  Here defendant
 waited two years after the federal seizure and forfeiture before seeking
 relief in state court.  His action failed because he acted out of time, not
 because he chose the wrong remedy.
      I agree with the Court that a criminal prosecution is an in personam
 proceeding and that seizure of defendant's property as part of that
 prosecution does not convert it to an in rem proceeding.  In order to
 establish in rem or quasi in rem, two criteria must be satisfied: the res
 must be present in the jurisdiction and a complaint involving the res must
 be filed in state court.  See Avery v. Bender, 124 Vt. 309, 314-15, 204 A.2d 314, 317 (1964).  A V.R.Cr.P. 41 motion for the return of property
 fulfills both criteria, see United States v. $2,542 in United States
 Currency, 754 F. Supp. 378, 382 (D. Vt. 1990) (V.R.Cr.P. 41(e) proceeding is
 quasi in rem), and consequently, timely filing of such a motion establishes
 prior exclusive jurisdiction.  Id. at 383.  Thus, under our law, there is a
 race to the res, however undesirable that may be, and defendant can insure
 the state court's prior jurisdiction over the seized property by filing a
 timely rule 41(e) motion.  Federal forfeiture proceedings will be
 forestalled at least until the court decides the motion.


                                    __________________________________
                                    Associate Justice