Opinion
No. 97 C 821.
September 25, 1998
MEMORANDUM OPINION AND ORDER
The U.S. government has sued Derrick Anderson ("Anderson") pursuant to 28 U.S.C. § 2201-02 (Declaratory Judgment Act), 18 U.S.C. § 3729 et seq. (False Claims Act), 18 U.S.C. § 1341 (fraud injunction statute) and has moved for summary judgment. In a Memorandum Opinion and Order issued on December 9, 1997, the court denied Anderson's motion for an enlargement of time to respond to the government's motion and granted the government's summary judgment motion. In a Memorandum Opinion and Order issued on June 12, 1998, the Court vacated its December 9 Memorandum Opinion and Order in order to give Anderson an opportunity to respond to the motion. It is clear, however, after reviewing Anderson's response brief and supporting affidavit, that there exists no genuine issue of material fact. Therefore, for the reasons set forth in this memorandum opinion and order, the Court grants the government's motion for summary judgment.
Facts
Anderson is a federal inmate. (Pl.'s Local General Rule ("Rule") 12M Stmt. ¶ 1.) He has filed what he claims are "commercial liens" in various jurisdictions against persons having anything to do with his criminal conviction. ( Id. ¶ 2.) These persons include members and former members of the United States Attorney's Office, his court-appointed defense attorney, federal judges, an employee of the Probation Office of this Court, numerous agents of the Drug Enforcement Administration, former and present Directors of the Federal Bureau of Investigation, and United States Senators. ( Id.) The liens purport to affect each lien debtor in both his or her personal and official capacity. ( Id. ¶ 5.)
Anderson has never filed a lawsuit against any of the supposed "lien debtors" and has never obtained a judicial determination that these people violated his rights or owe him money. ( Id. ¶ 3.) Nonetheless, Anderson claims they owe him money "[b]ecause [they] violated my rights and . . . violated [their] oath of office. A breach of the Articles of the Bill of Rights against me." ( Id. ¶ 3; Anderson Dep. at 8-15.)
Anderson sent lien notices to purported "lien debtors" via certified U.S. mail. (Pl.'s Rule 12M Stmt. ¶ 6.) These notices demand payment of five million dollars plus treble damages and Anderson offers to dismiss the liens if the "lien debtors" make payment to him. ( Id. ¶ 7.) Anderson claims that "by default," each of the lien debtors owes him five million dollars. ( Id.) Anderson has in fact placed liens on these individuals. ( Id. ¶ 4.) In addition, his lien activities and demands for payment have continued unabated since the United States brought this lawsuit. ( Id. ¶ 8.)
Discussion
Fed.R.Civ.P. ("Rule") 56(c) allows the Court to grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). In considering the evidence submitted by the parties, the Court does not weigh it or determine the truth of asserted matters. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). All facts must be viewed and all reasonable inferences drawn in the light most favorable to the non-moving party. Transamerica Ins. Co. v. South, 975 F.2d 321, 327 (7th Cir. 1992). "If no reasonable jury could find for the party opposing the motion, it must be granted." Hedberg v. Indiana Bell Tel. Co., Inc., 47 F.3d 928, 931 (7th Cir. 1995) (citing Anderson, 477 U.S. at 248).
First, the government argues that Anderson is liable under the False Claims Act. The Act provides:
Any person who . . . knowingly presents, or causes to be presented, to an officer or employee of the United States Government or a member of the Armed Forces of the United States a false or fraudulent claim for payment or approval . . . is liable to the United States Government for a civil penalty of not less than $5,000 and not more than $10,000, plus 3 times the amount of damages which the Government sustains because of the act of that person. . . .31 U.S.C.A. § 3729(a)(1). The term "knowingly" means that a person "has actual knowledge of the information; acts in deliberate ignorance of the truth or falsity of the information; or acts in reckless disregard of the truth or falsity of the information. . . . [N]o proof of specific intent to defraud is required." 31 U.S.C. § 3729(b). The term "claim" includes:
any request or demand, whether under a contract or otherwise, for money or property which is made to a contractor, grantee, or other recipient if the United States Government provides any portion of the money or property which is requested or demanded, or if the Government will reimburse such contractor, grantee, or other recipient for any portion of the money or property which is requested or demanded.
31 U.S.C. § 1329(c).
The Court finds that Anderson's liens and lien notices are "claims" within the context of the False Claims Act. Anderson demanded that each "lien debtor" pay approximately five million dollars or else Anderson would not release the lien. Although Anderson filed the liens on the "lien debtors" in their individual and official capacities, the Court finds that the purported lien debtors' only relationship with Anderson is that they played a role, however remote, in his conviction. Because a claim against an individual in his or her official capacity constitutes a claim against the government entity itself, Rascon v. Hardiman, 803 F.2d 269, 274 (7th Cir. 1986), the Court finds that Anderson has made claims against the United States.
With regard to the scienter requirement, Anderson admits that he knew that he never filed a lawsuit against any of the "lien debtors" prior to placing liens on them and sending lien notices. Thus, he had actual knowledge that his lien activities were false claims for payment. Having determined that Anderson knowingly made a false claim, the Court finds that Anderson violated the False Claims Act and that there is no genuine issue of material fact for trial.
Anderson's arguments that such liens are "commercial liens" pursuant to the Uniform Commercial Code § 2-201 (statute of frauds regarding contracts for sale of goods), that the "lien debtors" consented by failing to object within ten days of the notice of the lien, and that such liens are not subject to judicial rulings are clearly unsupported and untenable. ( See Def.'s Stmt. Facts ¶¶ 3-11.)
As for damages, the government, acknowledging that Anderson is an inmate with limited resources, asks that the Court impose a civil penalty for a single false claim and other damages as the Court deems appropriate under the statute. Accordingly, the Court finds Anderson liable to the government in the amount of $5,000.00. The Court does not award the government treble damages because the government has not made a showing of damages.
Second, the government asks for injunctive relief under 18 U.S.C. § 1345 ("section 1345"), the fraud injunction statute. The statute provides that the Attorney General may commence a civil action in any Federal court when a person is "violating or about to violate this chapter [including 18 U.S.C. § 1341 prohibiting mail fraud] or section 287 [prohibiting fictitious claims upon the United States or its agencies]." 18 U.S.C. § 1345. In order to issue a section 1345 injunction, the court must determine (1) whether an injunction is appropriate, and (2) if an injunction is appropriate, what is its proper scope. United States v. Brown, 988 F.2d 658, 663 (6th Cir. 1993).
The government argues that an injunction is appropriate because there is ample evidence to prove that Anderson is defrauding the government. Meeting the first requirement in the Section 1345 analysis means the government has the burden of proving by a preponderance of the evidence that a fraud has been committed. Brown, 988 F.2d at 663; United States v. Quadro Corp., 916 F. Supp. 613, 617 (E.D.Tex. 1996); United States v. Barnes, 912 F. Supp. 1187, 1194 (N.D.Iowa 1996).
A person violates the mail fraud statute if he devises "any scheme or artifice to defraud or for obtaining money or property by means of false or fraudulent pretenses, . . . [and] places in any post office . . . any matter or thing whatever to be sent or delivered by the Postal Service." 18 U.S.C. § 1341. A person violates the fictitious claims statute if he "makes or presents to any person or officer in the civil . . . service of the United States, or to any department or agency thereof, any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent." 18 U.S.C. § 287.
The Court finds that the government has shown by a preponderance of the evidence that Anderson violated the predicate statutes. The evidence shows by a preponderance that Anderson has devised an ongoing scheme that consists of demanding payment for debts not owed and filing liens for which he knows no legal basis exists and, in carrying out that scheme, has made extensive use of the U.S. Postal Service. Evidence also shows by a preponderance that Anderson, by claiming that these debts are owed in various federal officers' "official" capacities, has made fictitious claims upon the government in violation of 18 U.S.C. § 287.
Because the Court finds that an injunction is appropriate, the next step is to determine its proper scope. The Court finds that the government's requested relief is well within the proper scope of an injunction because such relief will remedy the injustice perpetrated by Anderson in filing the frivolous liens as well as prevent Anderson from continuing to harass individuals and interfere with their performance of governmental functions. In addition, the Court grants the government its requested declaratory relief as is within the Court's power under the Declaratory Judgments Act, 28 U.S.C. § 2201-02. See United States v. Poole, 916 F. Supp. 861, 863 (C.D.Ill. 1996) (granting government declaratory relief where defendant filed frivolous liens on federal employees involved in his criminal conviction).
Conclusion
For the forgoing reasons, the Court grants the government's motion for summary judgment. Having found Anderson liable under the False Claims Act, the Court enters judgment in the government's favor in the amount of $5,000.00. Anderson's motion to compel discovery is denied as moot.
In addition, the Court orders the following:
(A) All liens filed by defendant Anderson against all present and former federal officials are declared devoid of any legal effect;
(B) Defendant Anderson is ordered to immediately remove or cause to be removed all such liens;
(C) Defendant Anderson is enjoined from filing any lien in any jurisdiction relating to any present or former federal official, without first obtaining leave of this Court;
(D) Defendant Anderson shall pay the United States' costs in this action in an amount to be determined.Jury Verdict. This action came before the Court for a trial by jury. The issues have been tried and the jury rendered its verdict.
Decision by Court. This action came to trial or hearing before the Court. The issues have been tried or heard and a decision has been rendered.
IT IS HEREBY ORDERED AND ADJUDGED that the Court grants the government's motion for summary judgment. Having found Anderson liable under the False Claims Act, the Court enters judgment in the government's favor in the amount of $5,000.00.