Unreported / Non-Citable
Background
In 2015, Collins Family Farms, a company owned by Jimmy Collins, purchased real property in Tennessee. After Collins encountered legal trouble, the United States recorded a lis pendens notice on the property in 2017. The notice named only Jimmy and Ashley Collins as record owners, omitting Collins Family Farm. Vital Grasshopper Cove LLC acquired the property from Collins Family Farm in 2021.
In 2025, the court entered a Final Order of Forfeiture as to the property in the criminal case against Jimmy Collins. VGC then filed a petition for declaratory judgment under 21 U.S.C. § 853(n), arguing that the lis pendens and resulting forfeiture were null because the notice failed to identify Collins Family Farm as the record owner. VGC contended that it had no notice of the lis pendens and was therefore the rightful owner. The United States opposed the petition, arguing that the final forfeiture order vested all interests in the property to the government.
The Court’s Holding
The court granted VGC's petition, finding that VGC qualified as a bona fide purchaser under 21 U.S.C. § 853(n)(6). Because Collins committed the underlying crime before VGC purchased the property, VGC could not claim an interest predating the criminal acts, making the first prong of § 853(n)(6) inapplicable. The court therefore analyzed whether VGC was a bona fide purchaser for value who was reasonably without cause to believe the property was subject to forfeiture.
Applying Tennessee law, which governs the existence of property interests, the court found that VGC had no actual, constructive, or inquiry notice of the lis pendens. The lis pendens named only Jimmy and Ashley Collins, not Collins Family Farm, and Tennessee follows a grantor-grantee, name-based title system. VGC made all requisite inquiries into the property's chain of title but did not find the lis pendens or any other encumbrance, so the court found it was reasonably without cause to believe the property was subject to forfeiture.
The court rejected the United States' argument that the final forfeiture order vested all interests in the government, explaining that this interpretation would swallow § 853(n) whole and render the third-party remedy futile. The court granted the petition, amended its prior Final Order of Criminal Forfeiture, and ordered that the United States is divested of any rights, interest, or title in the property at 5904 and 5908 Grasshopper Road, Birchwood, Tennessee.
Key Takeaways
- A third party can establish bona fide purchaser status under 21 U.S.C. § 853(n)(6) even after a final order of forfeiture has been entered.
- Under Tennessee's grantor-grantee title system, a lis pendens that fails to name the actual record owner may not provide constructive notice to subsequent purchasers.
- A final forfeiture order does not automatically extinguish the rights of bona fide purchasers who lacked notice of the government's claim.
- Courts may grant § 853(n) petitions on the papers without a hearing when the petitioner provides ample evidence and the government does not meaningfully challenge the claims.
- State property law determines whether a property interest exists, while federal law determines whether that interest can be forfeited.
Why It Matters
This decision reinforces the statutory protections available to innocent third-party purchasers under federal criminal forfeiture law. It clarifies that the government's forfeiture powers are not absolute and that § 853(n) provides a meaningful remedy for bona fide purchasers who acquire property without notice of potential forfeiture claims.
The ruling also highlights the importance of proper notice in lis pendens filings, particularly in states with grantor-grantee title systems. Government agencies must ensure that lis pendens notices accurately identify all record owners to provide effective constructive notice to subsequent purchasers.