## Facts

- The United States brought a civil in rem forfeiture action under 21 U.S.C. § 881(a)(7) against the leasehold interest in a New York City public-housing apartment (Apartment 1-C) in Brooklyn.
- Clara Smith was the tenant of record for about 32 years and lived in the apartment with multiple family members, including minors.
- On January 31, 1990, an undercover officer purchased crack cocaine from a resident of the apartment identified as Smith’s granddaughter.
- In February 1990, police executed a search warrant and found substantial quantities of drugs and drug paraphernalia, supporting the conclusion that the apartment was used for drug storage and distribution.
- The government filed the forfeiture complaint on May 10, 1990; Smith later intervened, contesting seizure and forfeiture and asserting an innocent-owner defense.
- Smith testified she lacked knowledge of, and did not consent to, drug activity; after receiving a warning, she questioned family members and restricted guests from entering when she was absent.

## Issues

1. Whether due process requires pre-seizure notice and a hearing before the government seizes a public-housing leasehold under 21 U.S.C. § 881(a)(7), absent extraordinary circumstances.
2. Whether the government established probable cause that the apartment was used to commit or facilitate felony drug offenses within the meaning of § 881(a)(7).
3. Whether the leaseholder proved the statutory innocent-owner defense by showing the unlawful use occurred without her knowledge or consent.
4. What relief is appropriate when the leaseholder is innocent but another occupant used the premises for drug dealing.

## Decision

- The court held that forfeiture of a family’s public-housing leasehold requires meaningful pre-seizure procedural protections, including notice and a hearing, absent extraordinary circumstances.
- The court found the government established probable cause that the apartment was used to facilitate felony narcotics activity.
- The court held Clara Smith proved she was an innocent owner; her leasehold interest could not be forfeited under § 881(a)(7).
- The court concluded the culpable granddaughter could be removed from the apartment and that injunctive relief could issue to prevent future illegal use of the premises.

## Legal Principles

- A public-housing leasehold interest may constitute “real property” subject to civil forfeiture under 21 U.S.C. § 881(a)(7) when used to commit or facilitate federal drug felonies.
- When forfeiture would dispossess a family of its home, due process generally requires pre-seizure notice and an opportunity to be heard, unless exigent conditions justify immediate seizure.
- In a § 881(a)(7) forfeiture, once the government shows probable cause for forfeiture, the claimant bears the burden to establish an affirmative innocent-owner defense.
- An innocent-owner defense is established by proving the illegal use occurred without the claimant’s knowledge or consent; reasonable, practical efforts to prevent misuse may support lack of consent.
- Courts may tailor remedies to protect innocent residential interests while restraining and excluding culpable occupants and preventing continued unlawful use.

## Conclusion

The court permitted the government to pursue forfeiture of public-housing leaseholds used for drug offenses but required strong pre-seizure process and applied the innocent-owner exception to protect a long-term tenant and resident children, while authorizing targeted relief against the offending occupant and future illegal use.


United States v. Leasehold Interest in 121 Nostrand Ave., Apartment 1-C, 760 F. Supp. 1015 (E.D.N.Y. 1991)