Will 1933 $20 case be appealed to Supreme Court?
- Published: Aug 5, 2016, 6 AM
It looks like the government will get to keep the Langbord family’s 10 1933 Saint-Gaudens gold double eagles that were allegedly discovered in a family’s safe deposit box shortly after the sole 1933 double eagle that can be privately owned was sold for $7.6 million in 2002. A decade-long legal battle between the family and the government followed to decide ownership of the valuable coins.
In an Aug. 1 ruling by the United States Court of Appeals for the Third Circuit, nine judges joined a 60-page decision finding that, while there were errors at the trial level, these mistakes did not affect the outcome. In doing this, the majority sided with a jury’s 2011 decision awarding the coins to the government.
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The majority concluded its case by stating: “This case is unique for many reasons. It involves iconic American gold pieces that apparently had lain dormant in a safe-deposit box for decades. Almost immediately after the 1933 Double Eagles surfaced in 2002, the right to possess and own them was vigorously disputed. The resolution of that dispute required the District Court to consider novel questions of constitutional, statutory, and common law. The able trial judge worked diligently through all of the issues and gave both sides a fair trial. Once the jury had spoken, the District Court declared that the 1933 Double Eagles had always been property of the United States. Although the benefit of hindsight has convinced us that certain errors were committed in the conduct of the trial, they did not affect the outcome. We will affirm the judgment of the District Court.”
The government has long argued, “All 1933 Double Eagles are, and always have been, property belonging to the United States” and that the Langbord family “voluntarily surrendered” the coins to the Mint. Joan Langbord said she found the coins in the back of a safe-deposit box alongside property that had belonged to her father, Philadelphia jeweler and occasional coin dealer Israel Switt. Her two sons, David and Roy, joined her in the lawsuit.
Shortly after discovering the coins, the Langbord family through their attorney, Barry Berke, presented the 10 coins to the government for authentication. The Mint did not return the coins, claiming them as stolen property. In December 2006 the family brought suit in the United States District Court for the Eastern District of Pennsylvania against the Mint, the Department of the Treasury, and various federal officials, requesting that the government either initiate a forfeiture proceeding or return the coins.
That district court ruled in favor of the Langbords, finding that the Mint seized the coins unlawfully and that the family’s constitutional due process rights were violated.
The case went to trial in July 2011 in which a jury ruled in favor of the government. On Aug. 29, 2012, the district court confirmed that the coins were not lawfully removed from the Mint and remained property of the government, regardless of how the coins came into the family’s possession or applicable forfeiture statutes.
A contested point was whether the government appropriately filed its forfeiture complaint back in 2009 within a 90-day statutory deadline. In April 2015, two judges in a three-judge panel within the Third Circuit Court of Appeals overturned much of the district court’s rulings, finding that the government missed a crucial deadline under Civil Asset Forfeiture Reform Act. The panel’s majority effectively overturned the 2011 jury decision and ordered that the coins be returned to the family. While agreeing that the government did not meet the deadline, one judge in the three-judge panel differed and was of the opinion that this should not result in the return of the coins.
The split decision likely emboldened the government, and it filed a petition for rehearing en banc on July 28, 2015. With this, all 12 judges in the Third Circuit Court of Appeals would hear the case and decide. Oral arguments followed on Oct. 15, 2015.
At the hearing, the Langbord family contended that the government filed its forfeiture action too late and the district court erred at trial with respect to evidence and its jury instructions. The government reiterated that it did not have to initiate forfeiture proceedings against the coins because it was not obligated to repossess its own property.
The most recent decision held that the coins were properly treated as seized government property and that “seizure alone does not initiate a forfeiture proceeding because it does not implicate a transfer of legal title.” In comparing the Langbord situation with another case involving drug money, the court wrote, “A seizure is neither the same as a forfeiture nor does it automatically trigger forfeiture proceedings.”
NO WINDOW OF OPPORTUNITY
Despite the Langbord family claiming that there was a window of opportunity in which someone could have exchanged gold for coins — including 1933 double eagles — the most recent ruling concludes that the government’s experts established at the 2011 trial that no 1933 double eagles ever left the Mint through authorized channels.
At trial the government sought to prove that those 1933 double eagles that did leave the Philadelphia Mint had been stolen by the Mint’s Cashier George McCann, who held that role between 1934 and 1940, and that these coins were distributed by Joan Langbord’s father, Israel Switt.
The majority opinion sided with the government’s numismatic expert David Tripp, summarizing Tripp’s argument as follows: “The Mint’s records track the movement of each 1933 Double Eagle. These records were remarkably detailed, going so far as to show the payment of three pennies and their year of minting in one transaction. The records indicate that 445,500 Double Eagles were struck. Five hundred of those were sent to the Cashier, while the remaining 445,000 were sealed in a basement vault. Of the 500 held in the Cashier’s office, 29 were destroyed in tests to determine the coins’ purity and weight, 2 were sent to the Smithsonian, and the remaining 469 were placed in the basement vault. Then, in accordance with the Gold Reserve Act of 1934, the 445,469 coins left in the vault were ordered melted into gold bars. By this accounting, it is clear that not a single 1933 Double Eagle was ever authorized to be issued to the public — a fact to which both a 1933 Double Eagle historian and a forensic accountant testified.”
The U.S. Mint has shown a continued interest in reclaiming 1933 double eagles that left the Mint. The sole exception was a 1933 double eagle sold to Egypt’s King Farouk in 1944 that was granted an export permit; Mint officials quickly realized their mistake after further review, though by then the coin was no longer in the United States. An example that was acquired in 1995 by Stephen Fenton, an English coin dealer, was determined to be the lost Farouk coin. A lengthy legal battle between Fenton and the government followed and the “Fenton-Farouk” example was sold at auction in 2002 to an anonymous buyer for $7,590,020, with proceeds split equally between Fenton and the government.
A dissent in the Aug. 1 ruling penned by Judge Marjorie Rendell and joined by two other judges challenged the appeals court majority’s distinction between seizure and forfeiture, noting that seizure often includes forfeiture. The dissent concluded that the Mint would have been better off complying with the relevant forfeiture proceedings. Judge Rendell — who penned the 2015 decision overturning the District Court and finding that the government should return the coins — wrote, “This case involves precisely the type of situation that CAFRA was enacted to prevent: the Government’s seizing and taking ownership of property in derogation of the rights of ordinary citizens.”
Today, of the 445,500 1933 double eagle minted, two are housed in the National Numismatic Collection at the Smithsonian Institution; the “Fenton-Farouk” example is in an unnamed private collection; the Langbord’s 10 1933 double eagles remain in the possession of the government, who has not announced plans for the coins; and a 14th piece also subject to confiscation is held in an anonymous collection, according to several prominent dealers who have either seen the coin or been offered it.
The Mint has previously said that it intends to use the 10 Langbord coins for educational purposes and not melt them down.
In addition to the 14 pieces identified, rumors persist that other examples exist that have escaped the government’s notice, clandestinely placed in private collections.
After the Aug. 1 decision, Berke told Reuters, “The Langbord family fully intends to seek review by the Supreme Court of the important issue of the unbridled power of the government to take and keep a citizen’s property.” With this, the final chapter may yet remain to be written.
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