In a case with “a lengthy procedural history spanning the past three decades and involving litigation in various federal courts,” in Innovair Aviation Ltd. v. United States, No. 2010-5025 (Jan. 25, 2010), the United States Court of Appeals for the Federal Circuit held that the Court of Federal Claims had no subject matter jurisdiction to consider Innovair’s takings claim because “Congress provided a comprehensive administrative and judicial system in the district courts to review the in rem forfeiture of property seized pursuant to 21 U.S.C. § 881.” Slip op. at 18.
The case involves the government’s seizure of modified DC-3 airplanes sold to Air Columbia and allegations of drug smuggling, FAA regulations and the right to market turboprop conversion kits, and substitute res bonds. Relying on Vereda LTDA v. United States, 271 F.3d 1367 (Fed. Cir. 2001), the court concluded that a Tucker Act remedy was not available and that the CFC had no subject matter jurisdiction because Congress has provided a “comprehensive statutory scheme” to review property forfeitures. The Controlled Substances Act “vested in the Arizona [District] Court exclusive jurisdiction to approve the substitute res bond.” Slip op. at 14. Innovair should have used the process available under the CSA to protect its property, and could not pursue an after-the-fact takings remedy:
Innovair argues that it was deprived of its interest in the TLA [Technology License Agreement] when the Arizona Court approved the substitute res bond. If the Arizona Court’s approval allowed a taking of the TLA to occur, Innovair should have appealed that approval to the Ninth Circuit to protect its interst in the TLA. However, Innovair failed to appeal the Arizona Court’s approval of the substitute res bond, including the extinguishing clause, to the Ninth Circuit.
Slip op. at 15.
The opinion is worth reading if you like lengthy, complicated fact patterns and multi-jurisdictional procedural tales, or practice regularly in the CFC.