Gravity Funding, LLC and Gravity Capital, LLC v. United States, et al.

Under 21 U.S.C. § 853(n), third-party petitioners asserting an interest in property that has been forfeited to the federal government must file a verified petition within thirty days of being notified by the government identifying the nature and extent of their interest in the property. Gravity Capital, LLC (“Gravity Capital” or “Gravity”) filed a timely, sworn petition, attaching a verified deed of trust evidencing its security interest in forfeited real property, but the petition included mistaken references to Gravity Funding, LLC (“Gravity Funding”), an affiliated entity. The district court held that Gravity’s petition was submitted by Gravity Funding and Gravity Capital could not cure this technical pleading defect outside of Section 853(n)’s 30-day filing deadline, which had expired. The Fifth Circuit affirmed, widening an established circuit split on the core pleading and amendment rules that apply in forfeiture proceedings. The Fifth, Ninth, and Eleventh Circuits hold that Section 853(n)’s thirtyday filing deadline bars any amendments after the filing deadline. The Second and Seventh Circuits, on the other hand, reject this construction as violating the remedial purposes Congress expressly intended, holding that pleading amendments should be allowed for good cause. The question presented is whether Section 853(n) permits a third-party claimant to amend its petition to cure technical pleading defects after the expiration of the 30-day filing period, or whether the statute strictly prohibits all amendments requested thereafter, no matter the circumstances.