Opinion
CA 6:22-cv-01895-SAL-MHC
06-20-2023
Tekoa Tobias Glover, Plaintiff, v. United States of America, Drug Enforcement Agency, and D.E.A. Agent Farid Rajaee, Defendants.
REPORT AND RECOMMENDATION AND ORDER
Molly H. Cheery United States Magistrate Judge
Defendants United States of America and the Drug Enforcement Agency (“DEA”) (collectively, “Defendants”) move to dismiss the Complaint of pro se Plaintiff Tekoa Tobias Glover (“Plaintiff”). ECF No. 36. After the Court issued an order pursuant to Roseboro v. Garrison, 528 F.2d 309 (4th Cir. 1975), advising Plaintiff of the dismissal procedures and the possible consequences if he failed to adequately respond to Defendants' Motion to Dismiss, Plaintiff filed a Response in Opposition. ECF No. 48. Defendants filed a Reply to Plaintiff's Response. ECF No. 53.
Defendants caption their filings with the proper name “Drug Enforcement Administration.” See ECF No. 36 at 1. Nevertheless, the party name in the above caption is what is reflected on CM/ECF.
Contemporaneously with his Response, Plaintiff also filed a Motion to Compel Discovery, arguing he needed documents from Defendants to adequately respond to the Motion to Dismiss. ECF No. 49. Defendants filed a Response in Opposition to Plaintiff's Motion to Compel. ECF No. 54. The Motions are ripe for review.
Defendants do not appear on behalf of DEA Agent Farid Rajaee, but note the purported mailing to him was not delivered. ECF No. 36 at 1 n.1. Nevertheless, they contend the arguments contained within the Motion to Dismiss should operate to dismiss the case in its entirety.
All pretrial proceedings in this case were referred to the undersigned pursuant to the provisions of 28 U.S.C. § 636(b)(1)(A) and (B) and Local Civil Rule 73.02(B)(2)(e) and (f) (D.S.C.). Because the Motion to Dismiss is dispositive, this Report and Recommendation is entered for review by the District Judge. The corresponding Order addresses Plaintiff's Motion to Compel Discovery.
I. BACKGROUND
This action arises from the criminal and civil forfeiture of assets stemming from Plaintiff's criminal trial. Specifically, Plaintiff seeks judicial review of the forfeitures of DEA Asset No. 18-DEA-643910 (Wells Fargo Check #18252 in the amount of $36,370.00) and DEA Asset No. 18-DEA-642188 (2012 Infiniti QX56). Plaintiff alleges these assets were seized in violation of his constitutional rights and the Civil Asset Forfeiture Reform Act of 2000 and seeks judicial review of Defendants' actions under the Administrative Procedure Act of 5 U.S.C. § 702. Unless otherwise noted, the parties generally agree on the factual and procedural history of this matter.
A. Plaintiff's arrest and the initial seizure
On or about May 9, 2018, the DEA and Greenville County Sheriff's Offices obtained a search warrant for a residence in Greenville, South Carolina, to look for evidence based on a drug trafficking investigation. ECF No. 1 at 3. An Infiniti QX56 SUV was parked at the back of the driveway, which was subsequently seized by the DEA. ECF No. 1 at 3-4. On June 20, 2018, Plaintiff was arrested. See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF No. 46). On July 18, 2018, the DEA received the Wells Fargo Check (hereinafter “Wells Fargo Check”) from Plaintiff's former criminal defense attorney Howard Weintraub. ECF No. 1 at 4. On January 28, 2019, Plaintiff pled guilty to drug trafficking conspiracy and money laundering conspiracy charges. See United States of America v. Tekoa Tobias Glover, No. 6:18-cr-00588-TMC (D.S.C. 2019) (ECF No. 362).
On October 18, 2019, a judgment was entered in Plaintiff's criminal case, which incorporated by reference the Preliminary Order of Forfeiture concerning the Infiniti QX56 (which is discussed further below). See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF No. 535). During his criminal case, Plaintiff challenged the Government's seizure of the same funds from the Wells Fargo Check at issue in this civil case. See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF Nos. 180, 393); see also United States v. Glover, 8 F.4th 239, 242 (4th Cir. 2021) (“Immediately and persistently, [Plaintiff] began filing pro se motions arguing that the funds were not tainted[.]”), cert. denied, 211 L.Ed.2d 518, 142 S.Ct. 838 (2022). In July 2022, Plaintiff withdrew a Motion to Withdraw his guilty plea and accepted his 120-month sentence. See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF Nos. 880, 881).
B. Criminal Judicial Forfeiture of Infiniti QX56
Following seizure of the Infiniti QX56, the DEA initially commenced administrative forfeiture proceedings by sending a written notice of intent to forfeit the property to Plaintiff. See ECF No. 36-8. On September 18, 2018, DEA Operations Management, Asset Forfeiture Section (“OMA”), received a submission from Plaintiff referencing the vehicle. See ECF No. 36-9. On October 4, 2018, OMA sent a letter to Plaintiff explaining that his submission was defective as a claim because it was not executed under the penalty of perjury, and OMA granted Plaintiff an additional twenty days to cure the defect. See ECF No. 36-10. The letter was sent to the facility where Plaintiff was incarcerated and was received on October 10, 2018. See ECF No. 36-11. On October 30, 2018, OMA received another submission from Plaintiff. See ECF No. 36-12. This submission was referred to the U.S. Attorney's Office for judicial forfeiture. ECF No. 36-13 at 1. On November 6, 2018, a letter confirming this referral was sent to Plaintiff at the facility where he was incarcerated, but the letter was returned as “Attempted Not Known.” See ECF No. 36-13.
In the interim, the U.S. Attorney's Office for the District of South Carolina was proceeding with criminal judicial forfeiture of the vehicle. See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF No. 421); see also ECF No. 36-14. On October 18, 2019, the U.S. District Court for the District of South Carolina entered a Preliminary Order of Forfeiture. See ECF No. 36-15. On November 5, 2018, the DEA rescinded its administrative Order of Forfeiture, in deference to the criminal Preliminary Order of Forfeiture. See ECF No. 36-16. The United States Attorney's office submitted a filing with the court on December 30, 2019, indicating that the Preliminary Order of Forfeiture had become final, and the vehicle had been forfeited as of December 22, 2019. See ECF No. 36-17; United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF No. 574).
C. Administrative Forfeiture of Wells Fargo Check
On September 27, 2018, the DEA issued a Notice of Seizure of Property and Administrative Forfeiture Proceedings regarding the Wells Fargo Check. ECF No. 1-3; ECF No. 36-18. On October 30, 2018, the DEA received a letter dated October 25, 2018, from Plaintiff referencing the Wells Fargo Check. See ECF No. 36-19. On November 8, 2018, the DEA sent Plaintiff a letter stating it was unsure if he intended to file a claim or Petition for Remission of Forfeiture. See ECF No. 36-20. The letter stated that as a matter of discretion, the DEA was providing him with twenty days from the date of his receipt of the letter to cure any deficiencies and file a valid claim. ECF No. 36-20 at 2. Further, the letter clarified, “[a] Claim or Petition will be deemed filed (or submitted) on the business date it is actually received by the Forfeiture Counsel at the address listed above.” ECF No. 36-20 at 2 (emphasis in original). The letter was returned as “no longer at this address.” ECF No. 36-20 at 3. On December 21, 2018, the DEA sent the same letter to Plaintiff at a different facility. See ECF No. 36-21. On December 26, 2018, Plaintiff received the letter. See ECF No. 36-21 at 2. Based on this receipt, the DEA calculated the deadline for Plaintiff to file a claim as January 15, 2019. See ECF No. 36-23 at 1. Plaintiff thereafter sent a letter to the DEA (dated January 10, 2019, but postmarked January 16, 2019, and received by DEA on January 22, 2019). See ECF No. 36-22.
The DEA deemed Plaintiff's purported claim as untimely because it was received by the DEA on January 22, 2019 (i.e., after the January 15, 2019, deadline the DEA calculated). See ECF No. 36-23. On the other hand, Plaintiff alleges his claim was timely. ECF No. 1 at 5-6.
In February 2019, Plaintiff sent a letter to the DEA, requesting reconsideration. See ECF No. 1 at 6; see also ECF No. 36-24 at 1 (noting Plaintiff's request for a February 26, 2019, letter). Ultimately, the DEA denied Plaintiff's requests, and the Wells Fargo Check was administratively forfeited. See ECF No. 36-28.
D. Procedural history in this Court
On June 15, 2022, Plaintiff filed the Complaint in this action. ECF No. 1. Plaintiff requests the return of the Infiniti QX56 and the Wells Fargo Check. He asserts that, despite complying with all the administrative requirements to challenge the seizure, Defendants, in violation of his constitutional rights, have refused to return the assets.
On November 1, 2022, Plaintiff served Defendants with his Complaint. See ECF No. 28 at 1; ECF No. 28-1. On November 22, 2022, Plaintiff served Defendants with his First Set of Interrogatories and Requests for Admission. See ECF No. 28 at 1-2. As a result, Defendants moved to stay discovery, pending the resolution of Defendants' forthcoming Motion to Dismiss. See ECF No. 28. Defendants also specifically requested that the stay apply to all discovery served on all Defendants in this matter. ECF No. 28 at 2. On December 22, 2022, this Court granted Defendants' Motion to Stay Discovery. ECF No. 32.
On February 2, 2023, Defendants filed a Motion to Dismiss pursuant to Rules 12(b)(1) and 12(b)(6), asserting that this Court lacked subject matter jurisdiction and that Plaintiff had failed to state a claim upon which relief may be granted. ECF No. 36. Attached to the Motion to Dismiss is over 100 pages of materials outside of the pleadings. Plaintiff filed a Response in Opposition and filed a Motion to Compel Discovery, arguing he needed documents from Defendants to adequately respond to the Motion to Dismiss. ECF Nos. 48, 49. Defendants filed a Reply to Plaintiff's Response and a Response in Opposition to Plaintiff's Motion to Compel. ECF Nos. 53, 54.
II. LEGAL STANDARD
Defendants move for dismissal of the Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure.
A. Rule 12(b)(1)
A motion to dismiss under Rule 12(b)(1) represents a challenge to the Court's subject matter jurisdiction. Arbaugh v. Y & H Corp., 546 U.S. 500, 507 (2006). Pursuant to Rule 12(h)(3), “[i]f the court determines at any time that it lacks subject-matter jurisdiction, the court must dismiss the action.” Fed.R.Civ.P. 12(h)(3). “Lack of subject-matter jurisdiction may be raised at any time by a party or the court.” Hoblick, 526 F.Supp. at 132-33. “When a Rule 12(b)(1) motion challenge is raised to the factual basis for subject matter jurisdiction, the burden of proving subject matter jurisdiction is on the plaintiff.” Id. at 133 (citing Richmond, Fredericksburg & Potomac R. Co. v. United States, 945 F.2d 765, 768 (4th Cir. 1991)).
“The purpose of a Rule 12(b)(6) motion is to test the sufficiency of a complaint.” Williams v. Preiss-Wal Pat III, LLC, 17 F.Supp.3d 528, 531 (D.S.C. 2014) (quoting Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999)); see Republican Party of N.C. v. Martin, 980 F.2d 943, 952 (4th Cir. 1992) (“A motion to dismiss under Rule 12(b)(6) tests the sufficiency of a complaint; importantly, it does not resolve contests surrounding the facts, the merits of a claim, or the applicability of [affirmative] defenses.”). Pursuant to Rule 8 of the Federal Rules of Civil Procedure, a pleading must contain “a short and plain statement of the claim showing that the pleader is entitled to relief,” Fed.R.Civ.P. 8(a)(2), such that the defendant will have “fair notice of what the claim is and the grounds upon which it rests,” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (internal quotation marks omitted). “[T]he facts alleged ‘must be enough to raise a right to relief above the speculative level' and must provide ‘enough facts to state a claim to relief that is plausible on its face.'” Robinson v. Am. Honda Motor Co., 551 F.3d 218, 222 (4th Cir. 2009) (quoting Twombly, 550 U.S. at 555, 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). This plausibility standard is not analogous to a “probability requirement,” rather “it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
III. DISCUSSION
Plaintiff seeks judicial review of the forfeitures of the Infinity QX56 and the Wells Fargo Check. Specifically, Plaintiff alleges these assets were seized in violation of his constitutional rights and the Civil Asset Forfeiture Reform Act (“CAFRA”) of 2000 and seeks judicial review of the DEA's actions under the Administrative Procedure Act of 5 U.S.C. § 702.
Congress passed CAFRA, 18 U.S.C. § 983, “to create a single avenue for challenging a forfeiture of property seized by the federal government.” Guzman v. United States, No. 05 CIV. 4902 (LBS), 2005 WL 2757544, at *1 (S.D.N.Y. Oct. 24, 2005). CAFRA applies to “‘any forfeiture proceeding commenced on or after' August 23, 2000.” United States v. Contents of Two Shipping Containers Seized at Elizabeth, N.J., 113 Fed.Appx. 460, 463 (3d Cir. 2004) (citing 8 U.S.C. § 1324).
Money and property involved in violations of the Controlled Substances Act are subject to forfeiture to the United States. 21 U.S.C. § 881; see also 19 U.S.C. §§ 1602-1618. For assets valued at $500,000 or less, the United States may pursue forfeiture through either an administrative or a judicial forfeiture proceeding. See United States v. Minor, 228 F.3d 352, 354 (4th Cir. 2000); Ibarra v. United States, 120 F.3d 472, 474 (4th Cir. 1997). Relevant here, the DEA may initiate an administrative forfeiture, pursuant to 21 U.S.C. § 881, or the United States Attorney's Office may pursue a forfeiture count in a criminal indictment, pursuant to 21 U.S.C. § 853. Compare 21 U.S.C. § 881 (civil forfeiture) with 21 U.S.C. § 853 (criminal forfeiture); see also Honeycutt v. United States, 137 S.Ct. 1626, 1632 (2017).
If the United States elects to pursue an administrative forfeiture, it must send “personal written notice” of the administrative forfeiture proceeding, 28 C.F.R. § 8.9(b), to any individual “who appears to have an interest in the seized article.” 19 U.S.C. § 1607(a); see also United States v. Wilson, 699 F.3d 789, 794 (4th Cir. 2012). “Any person claiming property seized in a[n administrative] forfeiture proceeding . . . may file a claim with the appropriate official after the seizure.” 18 U.S.C. § 983(a)(2)(A). The “claim need not be made in any particular form,” 18 U.S.C. § 983(a)(2)(D), as long as it is made under oath and identifies the property being claimed and the claimant's interest in the property, 18 U.S.C. § 983(a)(2)(C).
“Once notified, interested parties may choose to allow the forfeiture to proceed administratively or may compel the government to initiate a judicial forfeiture action by filing a claim for the property.” Malladi Drugs & Pharms., Ltd. v. Tandy, 552 F.3d 885, 887 (D.C. Cir. 2009) (citing 18 U.S.C. § 983(a)(2)). If a claim is filed, the United States must either commence judicial forfeiture proceedings by filing a complaint in the district court or return the property to the claimant pending the filing of a complaint. See 18 U.S.C. § 983(a)(3)(A). However, if the government receives no response to the notice within the designated period, the seized property can be declared administratively forfeited to the government. See 19 U.S.C. § 1609(a).
The filing of a claim and cost bond halts the administrative process and converts the proceeding into a civil forfeiture action in federal district court. See 19 U.S.C. § 1608. The claim is transferred to a United States Attorney, who must initiate a judicial forfeiture action in a federal district court or return the seized property. 18 U.S.C. § 983(a)(3). In the subsequent civil forfeiture proceedings, the government bears the burden of proving, by a preponderance of the evidence, that the property is subject to forfeiture. 18 U.S.C. § 983(c)(1).
If a claimant fails to file a timely claim and cost bond, the property is declared administratively forfeited-a declaration that has the same force and effect as a final decree and order of forfeiture in a judicial forfeiture proceeding. 19 U.S.C. § 1609. At that point, the claimant's only option to recover the property is to petition the DEA's Asset Forfeiture Section for “remission or mitigation” of the forfeiture, which asks the agency for discretionary return of the property. 28 C.F.R. § 9.3; Malladi Drugs & Pharm., Ltd., 552 F.3d at 888-89.
Once the administrative forfeiture is completed, federal courts do not have subject matter jurisdiction to review the underlying merits of the forfeiture. See City of Concord, N.C. v. Robinson, 914 F.Supp.2d 696, 705 (M.D. N.C. 2012). However, “courts have repeatedly recognized that parties may file equitable challenges to administrative forfeitures because these proceedings ‘place due process rights at particular risk.'” Bullock v. United States, 176 F.Supp.3d 517, 525 (M.D. N.C. 2016) (cleaned up) (citations omitted); see also Minor, 228 F.3d at 357 (“Recognition of an equitable cause of action to challenge an administrative forfeiture based on inadequate notice-a cause of action that has been recognized by at least nine other courts of appeals-falls squarely within our discretion to safeguard constitutionally-protected interests.”); Ibarra, 120 F.3d at 474 n.4 (“A number of circuits have noted that once the administrative forfeiture is completed, district courts retain jurisdiction to review the forfeiture to determine compliance with due process or procedural requirements.”).
Defendants assert that Plaintiff's Complaint should be dismissed at this early stage because this Court lacks subject matter jurisdiction, and because Plaintiff has failed to state a claim. Specifically, Defendants argue Plaintiff has failed to state a claim upon which relief may be granted as to the Infinity SUV, and that this Court lacks subject matter jurisdiction over the forfeiture of the Wells Fargo Check. The Court addresses each forfeited asset in turn.
A. The Infinity QX56
Defendants argue that this Court should dismiss Plaintiff's claims with respect to the Infiniti QX56, pursuant to Rule 12(b)(6), as it was judicially forfeited in Plaintiff's criminal case and Plaintiff waived his appeal rights by pleading guilty. The Court agrees.
As noted above, the United States Attorney's Office may pursue a forfeiture count in a criminal indictment, pursuant to 21 U.S.C. § 853. See 21 U.S.C. § 853; Honeycutt, 137 S.Ct. at 1632. A “criminal forfeiture is part of a defendant's sentence.” United States v. Martin, 662 F.3d 301, 306 (4th Cir. 2011) (citation omitted). Thus, it “can only be challenged on direct appeal, or the challenge is waived.” United States v. Martinez-Mata, No. 3: 14CV10, 2014 WL 5430992, at *2 (E.D. Va. Oct. 24, 2014) (citation omitted), aff'd, 626 Fed.Appx. 437 (4th Cir. 2015). Consequently, a civil plaintiff who had their assets forfeited in their criminal case cannot collaterally attack the criminal forfeiture through a subsequent civil suit. See id.; see also 37 Associates, Trustee for the 37 Forrester Street, SW Trust v. REO Const. Consultants, Inc., 409 F.Supp.2d 10, 14 (D.D.C. 2006) (explaining that a final order of criminal forfeiture “is not subject to collateral attack in any other court”); Roberts v. United States, 141 F.3d 1468, 1471 (11th Cir. 1998) (explaining that the plaintiff could not file a separate civil suit to collaterally attack the injunctions issued by a court in a criminal forfeiture case).
Here, the Infiniti QX56 was criminally forfeited. See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF Nos. 421, 533, 574). Plaintiff pled guilty to the charges tied to the forfeiture of this vehicle, and when Plaintiff pled guilty, he waived his appeal rights. See United States of America v. Tekoa Tobias Glover, No. 6: 18-cr-00588-TMC (D.S.C. 2019) (ECF No. 362). Thus, to the extent Plaintiff is attempting to collaterally attack the criminal forfeiture in this civil suit, he is collaterally estopped from doing so. See Martinez-Mata, No. 3:14CV10, 2014 WL 5430992, at *2 (denying Rule 41(g) motion for return of a vehicle that was criminally forfeited where the plaintiff signed a plea agreement, and stating “to the extent [the plaintiff] attempts to end-run around the terms of his Plea Agreement, Rule 41(g) fails to provide a method to collaterally attack his criminal judgment and sentence, including the forfeiture of the vehicle”), aff'd, 626 Fed.Appx. 437 (4th Cir. 2015); see also Young v. United States, 489 F.3d 313, 315 (7th Cir. 2007) (“[A] criminal forfeiture is part of the defendant's sentence and must be challenged on direct appeal or not at all.”); United States v. $455,273.72, No. 11-5327, 2012 WL 1155743 (D.C. Cir. 2012) (noting prior criminal conviction may work as an estoppel in favor of the government in a subsequent civil proceeding); United States v. Contents of Smith Barney Citigroup Account No. 3419 in Name of Warshak, No. 1:06-CV-00185, 2009 WL 961228. At *4 (S.D. Ohio Apr. 8, 2009) (holding criminal verdict collaterally estops civil litigation as to assets listed in criminal case).
The Court takes judicial notice of Plaintiff's criminal case, and, thus, does not base its finding on evidence presented by Defendants. See Philips v. Pitt Cnty. Mem 'l Hosp., 572 F.3d 176, 180 (4th Cir. 2009) (noting courts “may properly take judicial notice of matters of public record.”); Colonial Penn Ins. Co. v. Coil, 887 F.2d 1236, 1239 (4th Cir. 1989) (noting the most frequent use ofjudicial notice “is in noticing the content of court records”).
Plaintiff cannot now collaterally challenge the criminal forfeiture of the Infiniti QX56 in this separate civil proceeding. For this reason, Plaintiff's claims with respect to the Infiniti QX56 fail as a matter of law, and the undersigned recommends granting Defendants' Motion to Dismiss that claim with respect to the Infiniti QX56.
B. The Wells Fargo Check
Defendants also argue this Court lacks subject matter jurisdiction over the administratively forfeited Wells Fargo Check. Specifically, they argue that Plaintiff's claim was untimely and that Plaintiff lacks standing to challenge the forfeiture. ECF No. 36 at 12-15.
Defendants also argue Plaintiff is not entitled to the relief he seeks (return of the funds), noting that while this Court may have the authority to vacate the administrative forfeiture, the U.S. Attorney's Office would be allowed to initiate a judicial forfeiture action. ECF No. 36 at 15. To the extent Defendants highlight this fact as a reason to dismiss the Complaint for failure to state a claim upon which relief may be granted, the undersigned is unpersuaded. While Plaintiff's end goal may be the return of the funds, the initial step is determining whether the administrative forfeiture should be vacated, which is what Plaintiff is challenging here. See Erickson v. Pardus, 551 U.S. 89, 94 (2007) (noting pro se complaints are held to less stringent standards than formal pleadings drafted by lawyers). Liberally construed, the relief Plaintiff seeks is vacatur of the forfeiture, which cannot be addressed without determining whether this Court has subject matter jurisdiction.
1. Subject Matter Jurisdiction
Generally, a defendant may challenge subject matter jurisdiction in one of two ways:
“(1) by contending that a complaint fails to allege facts upon which subject matter jurisdiction can be based (a ‘facial challenge') or (2) by contending that the jurisdictional allegations made in the complaint are not true (a ‘factual challenge').” Lutfi v. United States, 527 Fed.Appx. 236, 241 (4th Cir. 2013) (citing Kerns v. United States, 585 F.3d 187, 192-93 (4th Cir. 2009)). In a facial challenge, the plaintiff is given the same procedural protections he would normally receive when faced with a motion to dismiss for failure to state a claim under Rule 12(b)(6). Id. “Namely, all alleged facts are taken as true and the motion will be denied if the complaint alleges facts that, if proven, would be sufficient to sustain jurisdiction.” Id. On the other hand, in a factual challenge, a court may “go beyond the allegations of the complaint and in an evidentiary hearing determine if there are facts to support the jurisdictional allegations.” Id. (citation omitted). “In that situation, the presumption of truthfulness normally accorded a complaint's allegations does not apply, and the district court is entitled to decide disputed issues of fact with respect to subject matter jurisdiction.” Kerns, 585 F.3d at 192.
Generally, this legal framework is sufficient for the resolution of subject matter jurisdiction disputes. “However, in cases where the jurisdictional facts are ‘inextricably intertwined' with those central to the merits of the dispute, this framework falls short.” Lutfi, 527 Fed.Appx. at 241 (quoting Kerns, 585 F.3d at 193). In those cases, “a trial court should then afford the plaintiff the procedural safeguards-like discovery-that would apply were the plaintiff facing a direct attack on the merits.” Kerns, 585 F.3d at 193. With respect to such situations, the Supreme Court has explained that “a trial court should dismiss under Rule 12(b)(1) only when the jurisdictional allegations are clearly immaterial, made solely for the purpose of obtaining jurisdiction or where such a claim is wholly unsubstantial and frivolous.” Id. (internal quotation marks and alterations omitted).
i. Defendants present a factual attack on this Court's subject matter jurisdiction
Defendants argue this Court does not have jurisdiction to review the administrative forfeiture. Specifically, they argue that Plaintiff received adequate notice of the administrative forfeiture of the Wells Fargo Check, but that he did not file a timely claim. ECF No. 36 at 12-13. Thus, Defendants appear to contend that this Court cannot review the merits of the administrative forfeiture, as the administrative forfeiture was completed once Plaintiff failed to timely file a claim contesting the forfeiture.
However, in the Complaint, Plaintiff maintains that he filed a timely claim. He further asserts in his Response that, at the time he filed his claim, he was housed at the Anderson County and/or the Greenville County Detention center, and, thus, is entitled to protections of the prison mailbox rule. ECF No. 48 at 3.
Some courts have recognized an exception to the timeliness requirements where the claimant was incarcerated, extending the prison mailbox rule. See, e.g., Longenette v. Krusing, 322 F.3d 758, 764-65 (3d Cir. 2003) (holding that the prison mailbox rule applies to the filing of administrative forfeiture claims); Moskovits v. DEA, 774 F.Supp. 649, 653 (D.D.C. 1991) (same). In their Reply, Defendants argue the prison mailbox rule is inapplicable because Plaintiff was represented by counsel at the time. See ECF No. 53 at 2. However, there is nothing before the Court to suggest that Plaintiff's appointed counsel for the underlying criminal case was representing Plaintiff in this civil asset forfeiture claim. Regardless, these arguments go to the underlying timeliness issue which, as noted herein, raises a question of fact that the Court cannot address at this time.
Consequently, Defendants' arguments attack the factual basis underpinning subject matter jurisdiction, which requires this Court to go beyond the pleadings to resolve any disputed jurisdictional facts: namely, whether Plaintiff filed his claim within the period set forth in the Notices. Defendants contend that the Court can do so by considering the 100+ pages attached to their Motion to Dismiss. See ECF No. 36. Plaintiff, however, disagrees, arguing he needs the opportunity to conduct discovery to establish the timeliness of his claim. Notably, as set forth in his Motion to Compel Discovery, he argues that “there is evidence to be used to prove the facts stipulated in [the] Complaint” which Defendants allegedly have in their dominion and control. ECF No. 49.
Defendants oppose Plaintiff's Motion to Compel Discovery, arguing Plaintiff's Motion “ignores this Court's December 22, 2022, Text Order (ECF No. 32) granting Defendant's Motion to Stay Discovery (ECF No. 28).” ECF No. 54 at 1. However, as set forth in Defendants' Motion to Stay Discovery, the Court's Order was premised upon, among other things, the concept that courts “may properly exercise the discretion to stay discovery where a pending dispositive motion may make discovery unnecessary.” ECF No. 28 at 3 (citations omitted). At this time, Plaintiff has set forth sufficient arguments that limited discovery is necessary to address two factual issues raised by Defendants in their Motion to Dismiss.
To the extent that the timeliness of Plaintiff's claim goes to the question of whether this Court has subject matter jurisdiction to consider the merits of the administrative forfeiture, the Court cannot resolve this question at this stage. See Kerns, 585 F.3d at 193 (noting, in cases where the jurisdictional facts are “inextricably intertwined” with those central to the merits of the dispute, “a trial court should then afford the plaintiff the procedural safeguards-like discovery-that would apply were the plaintiff facing a direct attack on the merits”). Plaintiff should be allowed to conduct limited discovery for purposes of showing this Court has subject matter jurisdiction. Accordingly, Plaintiff's Motion to Compel is granted for the limited purposes set forth herein.
ii. Facial attack on subject matter jurisdiction.
The factual background detailed above included discussion of information supported by evidence presented outside of the pleadings. For purposes of the next two subsections-analyzing Defendants' facial attack on subject matter jurisdiction and Article III standing-the Court will only consider the allegations of the Complaint and the documents attached and incorporated therein.
To the extent Defendants assert a facial challenge to this Court's subject matter jurisdiction (see ECF No. 36 at 6-7, 12-13), the undersigned finds subject matter jurisdiction exists.
Defendants correctly note that once an administrative forfeiture is completed, federal courts do not have subject matter jurisdiction to review the underlying merits of the forfeiture. See City of Concord, N.C. , 914 F.Supp.2d at 705. However, the Court has jurisdiction to consider due process challenges to completed administrative forfeiture proceedings. See Bullock, 176 F.Supp.3d at 525; see also Minor, 228 F.3d at 357 (“Recognition of an equitable cause of action to challenge an administrative forfeiture based on inadequate notice-a cause of action that has been recognized by at least nine other courts of appeals-falls squarely within our discretion to safeguard constitutionally-protected interests.”); Ibarra, 120 F.3d at 474 n.4 (“A number of circuits have noted that once the administrative forfeiture is completed, district courts retain jurisdiction to review the forfeiture to determine compliance with due process or procedural requirements.”).
Furthermore, Plaintiff brings his claim pursuant to the Administrative Procedures Act (“APA”), 5 U.S.C. §§ 701-706. See ECF No. 1 at 1-3. Defendants put forth no argument that this Court cannot consider Plaintiff's claims under the APA. Thus, the undersigned concludes, as set forth above, jurisdiction under the APA is present. See Beck v. United States, No. CIV.A. WMN-10-2765, 2011 WL 862952, at *3 (D. Md. Mar. 10, 2011) (concluding the court “has jurisdiction under the APA” in a case where plaintiffs asserted that, after receiving proper notice of an administrative forfeiture, they timely filed a claim which the agency mischaracterized as untimely).
The APA authorizes a district court to set aside an agency action that was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law[.]” 5 U.S.C. § 706(2)(A); Randall v. United States, 95 F.3d 339, 348 (4th Cir. 1996) (quoting Chappell v. Wallace, 462 U.S. 296, 303 (1983)). Under the APA, a private party may sue the federal government to seek “relief other than money damages” for a “final agency action for which there is no other adequate remedy in a court[.]” 5 U.S.C. §§ 702, 704.
Accordingly, dismissal pursuant to Rule 12(b)(1) is not proper, at this time.
iii. Standing
Finally, Defendants argue Plaintiff lacks standing with respect to the Wells Fargo Check. Specifically, they maintain Plaintiff does not have a colorable interest in the check issued by Mr. Weintraub to the DEA, as Plaintiff does not allege that he was the payor or payee of the check. ECF No. 36 at 14.
Plaintiff argues he has a colorable interest in the funds because the funds were paid to Mr. Weintraub for Plaintiff's legal defense by wire transfers from numerous friends and family members. ECF No. 48 at 4. He argues that he has an interest in the funds and appears to argue part of the money was from a vehicle he sold to one of the payees of the wire transfer. ECF No. 48 at 4. He further maintains that “Defendants used the money as payment on a money judgment given to Plaintiff,” that “only monies attached to [] Plaintiff can be used to pay a money judgment,” and that Defendants “want to argue both sides of the coin” as Defendants argued “in the criminal context the money is Plaintiff's.” ECF No. 48 at 5. He notes that he only needs to allege a possessory or ownership interest at this stage of litigation. ECF No. 48 at 5.
To establish Article III standing, a party “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016), as revised (May 24, 2016). In challenging a civil forfeiture, a plaintiff “must have an ownership or possessory interest in the property, ‘because an owner or possessor of property that has been seized necessarily suffers an injury that can be redressed at least in part by return of the seized property.'” United States v. Phillips, 883 F.3d 399, 403 (4th Cir. 2018) (quoting United States v. $17,900, 859 F.3d 1085, 1090 (D.C. Cir. 2017)).
For purposes of standing in a civil forfeiture case, the “manner and degree of evidence required” depends on the stage of litigation. Id. (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)). “At the pleading stage, a claimant in a civil forfeiture case need only allege a possessory or ownership interest in the property.” Id. (emphasis in original). A claimant seeking the return of forfeited property has standing to challenge the forfeiture where he “has a legally cognizable interest in the property” forfeited. Pooler v. Wilson, 452 F.Supp.3d 428, 435 (D.S.C. 2020) (citations omitted).
In other words, a claimant's Article III standing in a forfeiture case “turns on whether the claimant has a sufficient ownership interest in the property to create a case or controversy.” United States v. One Lincoln Navigator 1998, 328 F.3d 1011, 1013 (8th Cir. 2003) (cited with approval in Phillips). “This threshold burden is not rigorous: ‘To have standing, a claimant need not prove the underlying merits of the claim. The claimant need only show a colorable interest in the property, redressable, at least in part, by a return of the property.'” Id. (citation omitted).
Here, at this early stage of the litigation-and without the benefit of engaging in any discovery on this issue-Plaintiff has alleged a sufficient interest in the forfeited property.Plaintiff alleged the funds were a part of his defense fund that were to be paid to his defense attorney, but that the funds were improperly seized. Although the funds apparently came from various sources, it appears Plaintiff has alleged that at least a portion of the money came from a vehicle he sold to one of the payees of the wire transfer. See ECF No. 48 at 4. In any event, the funds were for Plaintiff's benefit, and their seizure by Defendants prevented Plaintiff from hiring an attorney of his choice. See Spokeo, Inc., 578 U.S. at 338 (noting Article III standing requires a party to have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision”).
Defendants assert that Plaintiff must support his colorable interest claim with evidence beyond a bare assertion of ownership. ECF No. 36 (citing Pooler, 452 F.Supp.3d at 435). However, the “colorable interest” test adopted by the Fourth Circuit in Phillips addresses the “manner and degree of evidence required” for a claimant to establish standing at the summary judgment stage. See Phillips, 883 F.3d at 403. Without a doubt, Plaintiff will be required to support his allegations with some evidence; however, to the extent Defendants suggest this requirement attaches to Plaintiff at this stage of litigation, the undersigned disagrees. As set forth above, Plaintiff should be allowed to conduct discovery for purposes of showing this Court has subject matter jurisdiction, which necessarily includes establishing he has a colorable interest for purposes of standing.
The undersigned takes judicial notice of Plaintiff's criminal case, where Plaintiff persistently argued the seizure of funds prevented him from hiring an attorney of his choosing, in violation of his Sixth Amendment rights. See United States v. Glover, 8 F.4th 239, 242-45 (4th Cir. 2021) (noting Plaintiff's repeated attempts to have a hearing as to the seized funds so he could hire an attorney, and noting “we are inclined to agree with [Plaintiff] that the district court ought to have timely set and conducted a Farmer hearing” to determine whether the funds were untainted), cert. denied, 211 L.Ed.2d 518, 142 S.Ct. 838 (2022).
Thus, taking the allegations in the Complaint as true and viewing the alleged facts in the light most favorable to Plaintiff, he has sufficiently alleged a colorable interest in the forfeited property at this stage. See United States v. Seventeen Thousand Nine Hundred Dollars ($17,900.00) in United States Currency, 859 F.3d 1085, 1089-90 (D.C. Cir. 2017) (noting the “requirements for a [claimant] to demonstrate constitutional standing to challenge a forfeiture are very forgiving” and that, generally, “any colorable claim on the property suffices”); United States v. $148,840.00 in U.S. Currency, 521 F.3d 1268, 1273 (10th Cir. 2008) (“At the pleading stage, a claimant satisfies this burden by alleging a sufficient interest in the seized property, such as an ownership interest, some type of lawful possessory interest, or a security interest.”).
IV. RECOMMENDATION
For the reasons set forth above, it is RECOMMENDED that Defendants' Motion to Dismiss (ECF No. 36) be GRANTED in part and DENIED in part. Specifically, it is recommended that Defendants' Motion be GRANTED with respect to the Infinity QX56, but DENIED without prejudice as to the Wells Fargo Check.
The parties are directed to the Notice Page attached hereto for their rights to file objections to this recommendation.
V. ORDER
It is ORDERED that Plaintiff's Motion to Compel (ECF No. 49) is GRANTED for the limited purpose of conducting discovery as set forth herein pertaining to the issues of subject matter jurisdiction and standing, specifically (a) the timeliness of Plaintiff's claim as to the Wells Fargo check and (b) whether Plaintiff has a sufficient colorable interest in the Wells Fargo check to create a case or controversy.
The deadline for the parties to complete this limited discovery on these two specific issues is September 8, 2023. The deadline for any dispositive motions regarding this Court's subject matter jurisdiction and Plaintiff's standing is October 2, 2023.
Notice of Right to File Objections to Report and Recommendation
The parties are advised that they may file specific written objections to this Report and Recommendation with the District Judge. Objections must specifically identify the portions of the Report and Recommendation to which objections are made and the basis for such objections. “[I]n the absence of a timely filed objection, a district court need not conduct a de novo review, but instead must ‘only satisfy itself that there is no clear error on the face of the record in order to accept the recommendation.'” Diamond v. Colonial Life & Acc. Ins. Co., 416 F.3d 310 (4th Cir. 2005) (quoting Fed.R.Civ.P. 72 advisory committee's note).
Specific written objections must be filed within fourteen (14) days of the date of service of this Report and Recommendation. 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(b); see Fed.R.Civ.P. 6(a), (d). Filing by mail pursuant to Federal Rule of Civil Procedure 5 may be accomplished by mailing objections to:
Robin L. Blume, Clerk
United States District Court
Post Office Box 835
Charleston, South Carolina 29402
Failure to timely file specific written objections to this Report and Recommendation will result in waiver of the right to appeal from a judgment of the District Court based upon such Recommendation. 28 U.S.C. § 636(b)(1); Thomas v. Arn, 474 U.S. 140 (1985); Wright v. Collins, 766 F.2d 841 (4th Cir. 1985); United States v. Schronce, 727 F.2d 91 (4th Cir. 1984).