News that Uncle Sam had 10 1933 double eagles graded by Numismatic Guaranty Corp. is a surprise, but it is consistent with the federal rules of civil procedure.
Six of the coins are in MS-64 uncirculated condition, two are MS-65, one is an MS-66, and the final one was utilized as a pocket piece, much the same as coin dealer Jim McDermott did with a 1913 Liberty nickel in the 1950s.
The late Charles Alan Wright’s treatise on Federal Procedure speaks to Rule 34 of the Federal Rules of Civil Procedure and the need to examine property. “Rule 34, like the rules on interrogatories and requests for admissions, is limited to parties to an action. Save for that limitation it is as broad in scope as any of the discovery devices and is in all respects an essential part of a liberal and integrated scheme for the full disclosure of relevant information between the parties that will facilitate the prompt and just disposition of their litigation.”
Significantly, it recites that “The rule authorizes the broadest sweep of access, inspection, examination, testing, copying and photographing of documents or objects in the possession or control” of the parties and even non-parties.
On that basis, no doubt, the non-destructive tests of coin grading – an alternative name for valuation– is not hard to imagine.
On July 28, Judge Davis had a significant ruling in the case that has a history going back 75 years or more when Joan Langbord’s father, Israel Switt, was evidently involved in a transaction with a mint cashier that brought as many as 20 or 25 double eagles, all dated 1933, out of the Mint and into commerce – except for the 10 that were retained in a safety deposit box.
The government received the 10 coins from the Langbords in 2005 and, after determining them genuine, seized them. The lawsuit followed. The latest on key rulings by the Court:
Judge Legrome D. Davis, held that:
• government’s refusal to return coins constituted seizure;
• government’s seizure of coins was not justified through owners’ consent;
• government’s belief that coins had been stolen did not diminish owners’ Fourth Amendment rights;
• seizure of coins was objectively unreasonable;
• owners had sufficient possessory interest in coins to trigger application of procedural due process; and
• government deprived owners of their procedural due process rights by denying them pre-deprivation hearing before neutral official.
A trial is likely if the case does not settle by year’s end. Nothing public has been said about settlement, but everything about the case suggests it would be worthwhile.