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GEORGE S. CARDONA
Acting United States Attorney
CHRISTINE C. EWELL
Assistant United States Attorney
Chief, Criminal Division
STEVEN R. WELK
California Bar No. 149883
Assistant United States Attorney
Chief, Asset Forfeiture Section
FRANK D. KORTUM
California Bar No. 110984
Assistant United States Attorney
Asset Forfeiture Section
Federal Courthouse, 14 Floorth
312 North Spring Street
Los Angeles, California 90012
Telephone: (213) 894-6166/5710
Facsimile: (213) 894-7177
E-mail: Steven.Welk@usdoj.gov
Frank.Kortum@usdoj.gov
Attorneys for Defendants
UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
RAMON RIVERA, )
)
Plaintiff, )
)
v. )
)
RONNIE A. CARTER, ETC., )
ET AL. )
)
Defendants. )
)
)
)
)
)
)
NO. CV 09-2435 FMC (VBKx)
DEFENDANTS’ REPLY TO
PLAINTIFF’S OPPOSITION TO
MOTION FOR AN ORDER
AMENDING ORDER OF JULY
31, 2009 GRANTING
PLAINTIFF’S MOTION FOR
PRELIMINARY INJUNCTION
DATE: September 21, 2009
TIME: 10:00 a.m.
CTRM: 750(Roybal)
/ / /
/ / /
Case 2:09-cv-02435-FMC-VBK Document 47 Filed 09/04/2009 Page 1 of 9
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28 2
It is worth noting at the outset that plaintiff’s opposition to the defendants’
motion for a limited modification to the Court’s Order Granting Preliminary
Injunction contains almost no mention of the plaintiff or the plaintiff’s rights.
That is because plaintiff’s rights are fully protected by the portions of the Order
which the defendants do not seek to modify. Plaintiff’s opposition instead
consists of argument on behalf of the Mongols motorcycle gang and the individual
defendants in United States v. Cavazos, for whom plaintiff is not entitled to speak
or argue, either in this case or Cavazos.
This action, which is not the criminal action in which the forfeiture of the
registered marks is sought, and plaintiff’s motion, were premised upon plaintiff’s
claim that the Amended Order infringed on his First Amendment rights. In
arguing that the scope of the Amended Order should be limited to prevent the
government from seizing any property from him, he presented many arguments,
but his argument concerning the significance of the in personam nature of criminal
forfeiture did not appear until his final brief, to which the defendants were never
given an opportunity to respond. The Court’s adjudication of the merits of the
Cavazos criminal forfeiture in its July 31 Order in this case relied heavily upon
that argument.
It is wrong to state, as plaintiff does in his opposition, that defendants (in
their motion) have “repackag[ed] arguments the Court has already rejected”
(Opposition at 2), because the defendants were never given any opportunity to be
heard on plaintiff’s argument concerning the in personam nature of criminal
forfeiture as it relates to the criminal forfeitability of the marks in the Cavazos
case. Nor was there any reason for the defendants to address those issues in this
case, since they had no reason to suspect that the Court would use this case to
make a final merits determination of the criminal forfeiture in Cavazos. In its July
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28 3
31 Order, the Court determined that the Amended Order did potentially infringe on
plaintiff’s rights, and entered a preliminary injunction prohibiting the government
from seizing anything from plaintiff pursuant to the Order, a holding that the
defendants have not sought to modify. The motion is therefore not a motion for
reconsideration because the defendants do not seek to change the Court’s ultimate
ruling in the July 31 Order; they merely seeks a clarification that the Court did not
intend to improperly and prematurely make a final determination of issues
between different parties in a separate, pending criminal prosecution.
Even if this motion was considered a motion for reconsideration, such a
motion is properly granted where the court has committed clear error or made a
manifestly unjust decision. See School district 1J v. AcandS, Inc., 5 F.3d 1255,
1263 (9 Cir. 1993); Kona Enterprises, Inc. V. Estate of Bishop, 229 F,3d 877,th
890 (9 Cir. 2000). As explained in detail in the defendants’ moving papers, theth
premature determination of the criminal forfeitability of property is improper when
it occurs in the criminal case in which the issues are raised. There is literally no
authority for the proposition that it is appropriate for a court in a civil case to
adjudicate the merits of a criminal forfeiture sought in a separate criminal
prosecution involving different parties. Plaintiff certainly cites no authority for
that proposition in his opposition, opting instead to litter his response with
rhetorical flourishes accusing the defendants of “violating the rights of an
uncharged person” (Opposition at 6) and making the outrageous and unfounded
suggestion that the defendants “committed a fraud on the Court” (Opposition at 5).
The sole forfeiture case relied upon by plaintiff is an unpublished district
court case out of the Eastern District of New York, United States v. Surgent, 2009
WL 2525137 (E.D. N.Y. Aug. 17, 2009) . Even plaintiff admits at page 8 of his
opposition that the case is distinguishable (Opposition at 7), but he fails to
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acknowledge that it actually bears no similarities whatsoever to the situation
before the Court here and that the court’s analysis actually supports the
defendants’ position. Surgent is a criminal case, which this case is not. Surgent is
a money laundering case in which forfeiture was sought under 18 U.S.C. § 982,
not a RICO case in which forfeiture is sought under 18 U.S.C. § 1963. Surgent
addressed the standards to be applied in the entry of a Final Order of Forfeiture by
which the government sought the entry of a money judgment and substitute
property. Here, the government is seeking a Preliminary Order of Forfeiture (in a
separate case) with respect to specific property alleged (and admitted) to have
been involved in the underlying substantive offenses to which the defendant has
plead guilty. In Surgis, the defendant against whom the forfeiture order was
sought opposed its entry, and the ancillary proceeding was brought by the wife of
the defendant, who argued that she was the true owner of the substitute property
sought by the government. Here, no defendant has opposed the entry of the
proposed Preliminary Order of Forfeiture in Cavazos, and plaintiff has not only
repeatedly disavowed any ownership interest in the property sought for forfeiture,
but has managed to use his lack of a cognizable legal interest to avoid the bar of
18 U.S.C. § 1963(i).
However, what is most alarming about plaintiff’s reliance on Surgent is his
misrepresentation of the Surgent court’s discussion of the Advisory Committee
Notes to Rule 32.2. The discussion of the Notes in Surgent is in the context of its
analysis concerning what the government has to prove in order to obtain an order
of forfeiture for substitute assets. In the course of that discussion, the court notes
the distinction between substitute assets and “offense property” (i.e., property
alleged actually to have been involved in the underlying offense rendering it
subject to forfeiture), such as the marks in Cavazos. “The offense property
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Plaintiff suggests in footnote 8 of his opposition that United States v.1
Lazarenko, 575 F.Supp.2d 1139 (N.D. Cal. 2008) “does not apply because it is a
case about “offense property.” So is this case. The Surgent court distinguished
between offense property and substitute property. The property here, like in
Lazarenko, is alleged to be directly forfeitable pursuant to § 1963. It is therefore
“offense property.”
5
provision [of 18 U.S.C. § 982] requires the forfeiture of property ‘involved in’ the
crime, and is not explicitly limited to property ‘of the defendant.’ Accordingly,
when the government seeks an order forfeiting offense property, the government
need not make a preliminary showing of the defendant’s ownership to show that
the property is subject to forfeiture . . . . Id. at *22 (emphasis added). Plaintiff1
then cites to this court’s July 31 Order for the proposition that “”RICO forfeitures
applies only to ‘a RICO defendant’s property and his interest in the RICO
enterprise.’” Opposition at 8.
This is another in a long series of legal feints by plaintiff. The Surgent
court did not rely on this Court’s July 31 Order in reaching its conclusion. It
relied on the language of the statute under which the government was seeking
forfeiture, 18 U.S.C. § 982. If the Court does the same here, it will be compelled
to reach the same conclusion. The language of 18 U.S.C. § 1963 is far more
broad than that in § 982, requiring the forfeiture of “any interest the person has
acquired or maintained in violation of section 1962" (18 U.S.C. § 1963(a)(1)), any
interest in, security of, claim against, or property or contractual right of any kind
affording a source of influence over the RICO enterprise which the person has
established, controlled, conducted or participated in (18 U.S.C. § 1963(a)(2); and
any property constituting or derived from any proceeds obtained, directly or
indirectly, from racketeering activity. 18 U.S.C. § 1963(a)(3). Like § 982, the
forfeiture provisions of § 1963 are “not explicitly limited to property ‘of the
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“Thus, I conclude that these passages in the notes pertain only to the2
forfeiture of offense property, and therefor shed little light on the issue at hand.”
Id.
Plaintiff’s demand that the government be “precluded[d] . . . from seizing3
any items bearing the mark under any circumstances” (Opposition at 9) is
completely without support or authority, and goes well beyond the relief requested
6
defendant.’” Surgent at *22. Like § 982(a), § 1963(a) provides that “the court . .
. shall order . . . that the person forfeit to the United States all property described
in this subsection.” It does not say that the person shall forfeit all of “his or her”
property. The Surgent court concludes, in agreement with every single authority
before the Court in this case, that “the ancillary proceeding has become the forum
for determining the extent of the defendant’s forfeitable interest in the property,”
and that the standard applicable to substitute property is substantively different
than that applicable to offense property. Sturgent at *22 (quoting the Advisory
Committee Notes).2
What has been presented to this Court is overwhelming unanimous authority
that it is improper under Rule 32.2 for the Court to finally adjudicate the issue of
ownership of property subject to forfeiture until the ancillary proceeding stage in
the criminal case. There is not a shred of authority, statutory or judicial, for the
proposition that such an adjudication is proper in a civil case involving entirely
different parties, or even in the criminal case before entry of the Preliminary Order
of Forfeiture. The merits of the criminal forfeiture in Cavazos are not properly
before the Court for adjudication in this case, and never were. To the extent that
the plaintiff’s individual rights were affected by the amended Order, the
unchallenged portion of the Court’s July 31 Order granting plaintiff’s motion
resolves those issues, as the defendants have agreed that they will not seek to seize
any items from plaintiff pursuant to the Order.3
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in plaintiff’s complaint and his motion. Plaintiff sought only to limit the
government’s authority to seize items pursuant to the Amended Order, not to
prohibit seizures “under any circumstances.” The ruling plaintiff requests would,
for example, allow him to offer items bearing the mark in exchange for drugs with
impunity. Plaintiff is not entitled to such protection, and has made no showing
that he is entitled to such extraordinary relief.
7
Plaintiff’s other arguments are equally unavailing in light of the limited
relief sought by the defendants’ motion. The ten-day limit on motions to
reconsider preliminary injunctions does not bar defendants’ motion because, for
the reasons stated above, the defendants’ motion is not a motion for
reconsideration. Moreover, as noted by the court in the case relied upon by
plaintiff, Credit Suisse First BostonCorp. V. Grunwald, 400 F.3d 1119 (9 Cir.th
2005), notwithstanding the ten-day time limit, “a district court can modify an
interlocutory order ‘at any time’ before entry of a final judgment, and we have
long recognized ‘the well-established rule that a district court always has power to
modify or to overturn an interlocutory decision while it remains interlocutory.’”
Id. at 1124, quoting Tanner Motor Livery, Ltd. v. Avis, Inc., 316 F.2d 804, 809 (9 th
Cir. 1963).
In determining whether a motion requesting the district court to
reconsider its preliminary injunction should be treated as a motion for
reconsideration under Rule 59 or a motion for dissolution or
modification under Rule 54, we agree with the Third Circuit that “we
must look beyond the motion’s caption to its substance.” While
“[t]he purpose of a motion to reconsider under [Rule 59(e)] is to
relitigate the ‘original issue,’” “[a] motion to modify a preliminary
injunction is meant only to relieve inequities that arise after the
original order.”
Id. (Internal citations omitted). Here, the defendants’ motion seeks only to modify
the July 31 Order so that it does not effect the improper and untimely
determination of the merits of a dispute in a separate case.
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28 8
Plaintiff’s argument regarding the Court’s ability to disregard the scope of
his complaint and his motion is similarly unavailing. The defendants’ argument
concerning the forfeitability of the marks was for the limited purpose of informing
the Court’s determination of whether plaintiff was entitled to be exempted from
the scope of the Amended Order. The defendants never consented to a trial of the
merits of the criminal forfeitability of the marks in the context of plaintiff’s
motion. Plaintiff’s authority does not support the proposition that the United
States government can impliedly give such consent in circumstances like those
presented here. See Galindo v. Stoody, Inc., 793 F.2d 1502 (9 Cir. 1986)th
(involving a union member’s effort to seek relief from his employer and union);
and Bobrick Corp. v. American Dispenser Co., 377 F.2d 334 (9 Cir. 1967)th
(involving a jurisdictional issue over proper service in a patent infringement case).
Plaintiff also includes lengthy argument concerning trademark law
(Opposition at 4-6), which is nothing more than yet another attempt to improperly
litigate the issue of the ownership and forfeitability of the marks which, based on
the unanimous authorities in the moving and opposition papers, is not properly
determined until the ancillary proceedings in the criminal case. Plaintiff has not
cited a single authority for the proposition that the merits of a criminal forfeiture
are properly determined in a separate civil case involving a party with no
ownership interst in the property at issue. As desperately as plaintiff and his
lawyers wish to litigate those issues here, there is simply no authority that will
allow it.
What plaintiff does not do in his opposition is demonstrate that the
defendants are not entitled to the limited relief requested in their motion. The
undisputed authority before the Court shows that plaintiff’s motion was not the
proper setting for a determination of the merits of the criminal forfeiture in
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