CBP’s Detention of Goods for Forfeiture

The “detention of goods” exception to the Federal Tort Claims Act (“FTCA”) provides in 28 U.S.C. § 2680(c) that the United States does not waive sovereign immunity for claims arising in respect of the detention of any goods, merchandise, or other property by any law enforcement officer. This exception for the “detention of goods” is “generally is interpreted broadly.” 522 F.3d at 1074 (citation omitted).

In Kosak v. United States, the Supreme Court held that the detention of goods exception applies to “any claim arising out of the detention of goods, . . . includ[ing] a claim resulting from negligent handling or storage of detained property.” 465 U.S. 848, 854, 104 S. Ct. 1519, 79 L. Ed. 2d 860 (1984).

There is an exception to the detention of goods exception, found in the Civil Asset Forfeiture Reform Act (“CAFRA”). That provision applies to claims arising out of property damage if:

1. the property was seized for the purpose of forfeiture under any provision of Federal law providing for the forfeiture of property other than as a sentence imposed upon conviction of a criminal offense;
2. the interest of the claimant was not forfeited;
3. the interest of the claimant was not remitted or mitigated (if the property was subject to forfeiture); and
4. the claimant was not convicted of a crime for which the interest of the claimant in the property was subject to forfeiture under a Federal criminal forfeiture law.

28 U.S.C. § 2680(c) (emphasis added).

“In short, CAFRA canceled the detention of goods exception and restored the waiver of sovereign immunity—or ‘re-waived’ sovereign immunity—with respect to certain forfeiture-related seizures. Foster v. United States, 522 F.3d 1071, 1075 (9th Cir. 2008).

For that reason, plaintiffs may sue the United States for “any claim based on injury or loss of goods, merchandise, or other property” if those four factors are met. See 28 U.S.C. § 2680(c).

In Foster, the Ninth Circuit held that the CAFRA exception “applies only to property seized solely for the purpose of forfeiture. . . [T]he fact that the government may have had the possibility of a forfeiture in mind when it seized Plaintiff’s property does not detract from the application of the detention of goods exception when criminal investigation was a legitimate purpose of the initial seizure.” Id. Under Foster, if law enforcement had any purpose other than forfeiture when seizing the property, the detention of goods exception applies and the CAFRA exception does not, so the United States maintains its sovereign immunity. See id.

Under CAFRA, the Court determines only that the property was not seized for the purpose of forfeiture. This holding serves the objectives of the FTCA exceptions by ensuring that certain governmental activities are not disrupted by the threat of damage suits.

In United States v. $149,345 U.S. Currency, 747 F.2d 1278, 1283 (9th Cir. 1984), the court found the “apparent intent of section 2680(c) was to limit governmental liability for improper seizures and to restrict claimants to the statutory procedures of the forfeiture laws.” This policy comports with the “well-established principle that waivers of sovereign immunity must be construed strictly in favor of the sovereign.” Foster, 522 F.3d at 1074 (citations omitted).