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U.S. v. $11,922,300

United States District Court, E.D. Washington
Mar 30, 2006
No. CV-03-256-RHW (E.D. Wash. Mar. 30, 2006)

Opinion

No. CV-03-256-RHW.

March 30, 2006


ORDER DENYING PLAINTIFF'S MOTION TO DISMISS


Before the Court are Plaintiff's Motion to Dismiss Claim of Blacksheep Distributing (Ct. Rec. 67) and Motion to Dismiss Claim of L.A. Nelson, Inc. d/b/a Burke's Distributing (Ct. Rec. 70). A hearing was held on the motions on March 22, 2006. Plaintiff was represented by Jane Kirk. Claimant Blacksheep Distributing was represented by Carl Oreskovich; Claimant Burke's Distributing was represented by David Grosbeck.

PROCEDURAL BACKGROUND

On July 18, 2003, the United States filed a complaint for forfeiture of 11,922,3300 cigarettes that were previously seized as contraband. Plaintiff also filed a related complaint for forfeiture of a cash and a bank account. The two cases were consolidated in the above-captioned case. Claimants Blacksheep Distributing and Burke's Distributing filed Notices of Claim to Seized Property. Plaintiff now moves to dismiss the claims of Burke's Distributing and Blacksheep Distributing, asserting that the claimants are merely unsecured creditors, and as such, they lack standing to bring a claim against the seized property.

DISCUSSION

A. Standard of Review

In ruling on a Fed.R.Civ.P. 12(b)(6) motion to dismiss for lack of standing, the court must accept as true all material allegations of the complaint, and must construe the complaint in favor of the complaining party. Hong Kong Supermarket v. Kizer, 830 F.2d 1078, 1080 (9th Cir. 1987).

B. Standing

In order to have standing to contest a civil forfeiture under Article III, a claimant must have a sufficient interest in the property to create a case or controversy. United States v. Real Property Located at 5208 Los Franciscos Way, 385 F.3d 1187, 1191 (9th Cir. 2004); United States v. One Lincoln Navigator 1998, 328 F.3d 1011, 1013 (8th Cir. 2003). The standard is not a rigorous one: "the claimant need demonstrate only a colorable interest in the property, for example, by showing actual possession, control, title, and financial stake." 5208 Los Franciscos Way, 385 F.3d at 1191.

C. Forfeiture Statute

Claimants assert that they have a claim against the forfeiture cigarettes and money under the innocent owner defense. In order to assert the innocent owner defense, claimants must have a colorable interest in the property sought to be forfeited. At the hearing, Plaintiff conceded that claimants have a colorable interest in the cigarettes as an unpaid cash-seller. Plaintiff challenged the claimants' assertions that they had a colorable interest in the seized cash and bank account. At this point in the proceedings, the Court accepts the claimaints' claims that they have a colorable interest in the money as true. Because questions of fact exist regarding this issue, it would be better handled on a motion for summary judgment after discovery has been completed.

18 U.S.C. § 983(d)(1) provides for an innocent owner defense. Specifically, the statute states:

An innocent owner's interest in property shall not be forfeited under any civil forfeiture statute. The claimant shall have the burden of proving that the claimant is an innocent owner by a preponderance of the evidence.
18 U.S.C. § 983(d)(6) sets out the definition of "owner":
In this subsection, the term "owner" —
(A) means a person with an ownership interest in the specific property sought to be forfeited, including a leasehold, lien, mortgage, recorded security interest, or valid assignment of an ownership interest; and

(B) does not include —
(i) a person with only a general unsecured interest in, or claim against, the property or estate of another.

Accordingly, IT IS HEREBY ORDERED:

1. Plaintiff's Motion to Dismiss Claim of Blacksheep Distributing (Ct. Rec. 67) is DENIED.

2. Plaintiff's Motion to Dismiss Claim of L.A. Nelson, Inc. d/b/a Burke's Distributing (Ct. Rec. 70) is DENIED. IT IS SO ORDERED. The District Court Executive is hereby directed to enter this order and to furnish copies to counsel.


Summaries of

U.S. v. $11,922,300

United States District Court, E.D. Washington
Mar 30, 2006
No. CV-03-256-RHW (E.D. Wash. Mar. 30, 2006)
Case details for

U.S. v. $11,922,300

Case Details

Full title:UNITED STATES OF AMERICA, Plaintiff, v. ELEVEN MILLION NINE HUNDRED…

Court:United States District Court, E.D. Washington

Date published: Mar 30, 2006

Citations

No. CV-03-256-RHW (E.D. Wash. Mar. 30, 2006)