United States of America v. 206 Firearms et al

MEMORANDUM in Support of MOTION to Strike Counts I and II of the Complaint -

C.D. Cal.July 7, 2010

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS Jason A. Davis - SBN 224250 Davis & Associates 27281 Las Ramblas, Suite 200 Mission Viejo, CA 92691 Tel 949.310.0817/Fax 949.288.6894 E-Mail: Jason@CalGunLawyers.com C.D. Michel - S.B.N. 144258 Cmichel@MichelandAssociates.com Joseph A. Silvoso III - SBN 248502 Jsilvoso@MichelandAssociates.com MICHEL & ASSOCIATES, P.C. 180 E. Ocean Boulevard, Suite 200 Long Beach, CA 90802 Telephone: 562-216-4444 Attorneys for Claimant Stephen Mitchell UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA, Plaintiff, v. 206 FIREARMS and 41,725 ROUNDS OF AMMUNTION, Defendants. ) ) ) ) ) ) ) ) ) ) ) CASE NO: CV 09-9235 MMM (AGRx) MEMORANDUM IN SUPPORT OF MOTION TO STRIKE AND MOTION FOR JUDGMENT ON THE PLEADINGS DATE: September 13, 2010 TIME: 10:00 a.m. ROOM: 780 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 1 of 22 Page ID #:193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS TABLE OF CONTENTS PAGE INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 I. COUNT I OF THE COMPLAINT FAILS TO SATISFY THE PARTICULARITY REQUIREMENT OF 18 U.S.C. §924(d)(2)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 II. THE COUNT I REFERENCES TO “CONVICTED FELONS” ARE INSUFFICIENT TO ALLEGE VIOLATION OF § 922(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 III. THE COMPLAINT FAILS TO ALLEGE SPECIFIC ELEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 COUNT I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 COUNT II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 2 of 22 Page ID #:194 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ii MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS TABLE OF AUTHORITIES PAGE(S) FEDERAL CASES Beecham v. United States, 511 U.S. 368, 114 S.Ct. 1669, 128 L. Ed. 2d 383 (1994) . . . . . . . . . . . . . 11 Edwards v. City of Goldsboro, 178 F.3d 231 (4th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 National Rifle Association v. Brady, 914 F.2d 475 (4th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Old Chief v. United States, 519 U.S. 172, 117 S.Ct. 644, 136 L. Ed. 2d 574 (1997) . . . . . . . . . . . . . . . 11 Small v. United States, 544 U.S. 385, 125 S.Ct. 1752, 161 L. Ed. 2d 651 (2005) . . . . . . . . . . 10, 11 United States v. $38,000.00 in United States Currency, 816 F.2d 1538 (11th Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 United States v. $50,040 in United States Currency, 2007 WL 1176631, *2 (N.D. Cal. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051(9th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 United States v. $8,221,877.16 in United States Currency, 148 F. Supp.2d 427 (D.N.J. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 United States v. 1,922 Assorted Firearms, 330 F. Supp. 635 (E.D. Mo. 1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7, 8 United States v. 2265 One-Gallon Paraffined Tin Cans, 260 F.2d 105 (5th Cir. 958) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 United States v. Dahms, 938 F.2d 131 (9th Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 3 of 22 Page ID #:195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS TABLE OF AUTHORITIES (CONT.) PAGE(S) FEDERAL CASES (CONT.) United States v. Eighty-Six Firearms and Twenty-Two Rounds of Ammunition, 623 F.2d 643 (10th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 United States v. Fifty-Two Firearms, 362 F. Supp. 2d 1208 (M.D. Fla. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . 8, 11 United States v. Hanley, 190 F.3d 1017 (9th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 United States v. One Assortment of Seven Firearms, 632 F.2d 1276 (5th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 United States v. One assortment of 12 Rifles and 21 Handguns, 313 F.Supp 641 (N.D. Fla. 1970) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 United States v. Rutgard, 116 F.3d 1270 (9th Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 United States v. Simpson, 442 F.3d 737 (9th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 United States v. Valerio, 441 F.3d 837 (9th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 United States v. Yagman, 502 F. Supp.2d 1084, 1087, 1089 (C.D. Ca 2007) . . . . . . . . . . . . . . . . . . . . 9 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 4 of 22 Page ID #:196 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iv MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS TABLE OF AUTHORITIES (CONT.) PAGE(S) STATUTES 8 U.S.C §1101(a)(26) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 18 U.S.C §921(a)(20) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4, 10, 11 18 U.S.C §922(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 10, 11, 12, 13 18 U.S.C §922(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 18 U.S.C §923 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 18 U.S.C §923(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 18 U.S.C §924(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 14 18 U.S.C §924(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 12, 13, 14 18 U.S.C §924(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 13 18 U.S.C §924(d)(2)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 4, 6, 8 , 9 18 U.S.C. §925 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 18 U.S.C §983(a)(4(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 21 U.S.C.§802 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 RULES Federal Rules of Civil Procedure Rule 12(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Federal Rules of Civil Procedure Rule 12(b)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Federal Rules of Civil Procedure Rule 12(c) . . . . . . . . . . . . . . . . . . . . . . . . . . 2, 15 Federal Rules of Civil Procedure Rule 12(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2 Federal Rules of Civil Procedure Rule 12(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2 Federal Rules of Civil Procedure Rule 12(h)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 5 of 22 Page ID #:197 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS TABLE OF AUTHORITIES (CONT.) PAGE(S) RULES (CONT.) Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions Rule E(2)(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 2, 15 Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions Rule G(2)(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 15 LEGISLATIVE MATERIALS Firearms Owners Protection Act, P.L. 99-308, 100 Stat. 449 (1986) . . . . . . . . . 5, 6 Gun Control Act, P.L. 90-618, § 102, 82 Stat. 1213 (1968) . . . . . . . . . . . . . . . . . . 5 House Report No. 495, 99th Cong., 2d Sess. (1986), reprinted in 1986 U.S. Code Cong. & Admin. News 1327 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Senate Report 97-476, 97th Cong., 2d Sess. (1982) . . . . . . . . . . . . . . . . . . . . . . . . 7 Senate Report 98-583, 98th Cong. 2d Sess. (1984) . . . . . . . . . . . . . . . . . . . . . . . . 6 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 6 of 22 Page ID #:198 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “Application of this standard to civil forfeiture actions has evolved to the 1 standard stated in subdivision (2)(f)." Advisory Committee Notes, Supp. Rule G. Little caselaw exists on Rule G because it only became effective at the end of 2006, but it has been held that “the civil forfeiture complaint sufficiency standard is identical under Rules G and E(2)(a).” United States v. $50,040 in United States Currency, 2007 WL 1176631, *2 (N.D. Cal. 2007). 1 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS Claimant Stephen Mitchell. (hereinafter “Claimant”), through his counsel, hereby sets forth the following facts, reasons, and authorities in support of this motion to strike and to dismiss the Complaint. INTRODUCTION The Complaint seeks to forfeit 206 firearms and 41,725 rounds of ammunition based upon allegations that sixteen of these firearms and an undisclosed amount of this ammunition were allegedly being sold to unqualified persons and/or the subject of record keeping errors. It thus fails to state sufficiently detailed facts with the required particularity to fulfill the applicable pleading requirements and fails to state a proper claim for forfeiture. This motion to dismiss the Complaint is made pursuant to the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. Rule G(2)(f) provides: “The complaint must: . . . (f) state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Moreover, Rule E(2)(a) provides that “the complaint shall state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.”1 While the Ninth Circuit has not opined on Rule G(2)(f), it held that Rule E(2)(a) imposes a “pleading-with-particularity requirement” and “abandon[s] notice pleading in forfeiture cases.” United States v. $191,910.00 in U.S. Currency, 16 F.3d 1051, 1068 & n.34 (9th Cir. 1994). The Complaint here fails to meet the standard in either rule and should be stricken pursuant to Rules 12(e) and (f), Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 7 of 22 Page ID #:199 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 United States v. $38,000.00 in United States Currency, 816 F.2d 1538,2 1547n.20 (11 Cir. 1987), explains the interplay between these rules: A claim that the complaint does not state sufficient facts to permit the party to frame a responsive pleading [Fed.R.Civ.P. 12(f)] is a valid basis for a motion to strike. Fed.R.Civ.P. 12(e). While under the Federal Rules a party wishing to file such a motion does so after making a motion for a more definite statement, id., the standard of particularity for complaints filed pursuant to the Supplemental Rules is more stringent than is that of the Federal Rules. See Supplemental Rule E(2) . . . . Since both Rule C(6) and 18 U.S.C. § 983(a)(4)(B) require the filing of an 3 answer, a claimant may not file a motion to dismiss under F.R.Civ.P. 12(b) in lieu of an answer. United States v. $8,221,877.16 in United States Currency, 148 F. Supp.2d 427, 433-34 (D. N.J. 2001). 2 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS Federal Rules of Civil Procedure.2 Claimant also moves for judgment on the pleadings pursuant to Rule 12(c), Federal Rules of Civil Procedure. The Complaint fails to state a claim upon which relief may be granted because its allegations do not, as a matter of law, warrant the forfeiture. Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999),3 explains: Rule 12(h)(2) provides that the defense of failure to state a claim upon which relief can be granted as set forth in Rule 12(b)(6) may be raised "by motion for judgment on the pleadings, or at the trial on the merits." . . . Therefore, as a matter of motions practice, the Defendants' motion should be viewed as a Rule 12(c) motion for judgment on the pleadings raising the defense of failure to state a claim upon which relief can be granted. The Complaint seeks to forfeit 206 firearms and 41,725 rounds of ammunition. Allegedly Claimant, a federally-license firearms dealer: made "straw sales" of a small number of other specific firearms and ammunition to a person purported to be a felon; possessed 12 firearms off the license premises at his home; failed to report as recovered 5 firearms that were reported as stolen; and failed to accurately Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 8 of 22 Page ID #:200 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Four of the firearms specifically identified are subject to multiple Counts.4 Complaint ¶ 16.5 09-ATF-015874, 09-ATF-015875, 09-ATF-015877, 09-ATF-016007, 6 09-ATF-016183. Emphasized defendants are specifically identified as subjects in Counts II and III. 09-ATF-015874, 09-ATF-015875, 09-ATF-015877, 09-ATF-015878, 7 09-ATF-015879, 09-ATF-015880, 09-ATF-015881, 09-ATF-015882, 09-ATF-015883, 09-ATF-015884, 09-ATF-015885, 09-ATF-015886. Emphasized defendants are specifically identified as subjects in multiple Counts. 09-ATF-015882, 09-ATF-016192, and 09-ATF-016298. Emphasized defendant 8 is specifically identified as a subject in Counts III and IV. 3 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS maintain records for 3 firearms - totaling 16 of the total 206 firearms in dispute.4 Specifically, Count I of the Complaint generally alleges that the Defendant firearms and ammunition were "intended to be used" in violation of 18 U.S.C. § 922(d), which prohibits transfer of firearm(s) to a list of prohibited persons. Complaint ¶ 32. Stripped of generalizations, the Complaint is unclear if the firearm was transferred. Though lacking in any detail, except as discussed below, the Complaint generally alleges the transfer to a felon of firearms and ammunition. Count II5 alleges five defendant firearms were the subject of a false statement in that6 Claimant reported said firearms stolen, in violation of 18 U.S.C. § 924(a)(1)(A). Complaint ¶ 34. Count III alleges that the 12 defendant firearms were involved in7 a willful violation of 18 U.S.C. §923, in that they were the subjects of unlicensed gunsmithing at Claimant's unlicensed premises (i.e. his residence). (Complaint ¶ 37.) Count IV alleges that three defendant firearms were not recorded in the A&D8 records of Claimant, also in violation of 18 U.S.C. §923. The following demonstrates that the Complaint or portions thereof should be stricken and that judgment on the pleadings should be issued to Defendants and Claimant. First, the Complaint fails to satisfy 18 U.S.C. § 924(d)(2)(c) with regard to the 206 defendant firearms and 41,725 rounds of ammunition, which subjects to Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 9 of 22 Page ID #:201 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS forfeiture “only those firearms or quantities of ammunition particularly named and individually identified” as involved, used, or intended to be used in specified offenses and thus, Count I for forfeiture on that basis fails to state a claim. Second, Counts I is insufficient to allege claims because they allege transfers to “convicted felons,” a term which does not appear in the list of prohibited categories in 18 U.S.C. § 922(d) and which fails to take account of significant exclusions in §921(a)(20). Third, there is no obligation to report as recovered firearms previously believed to be stolen and reported as such, nor is there an allegation that Claimant knowingly made a false statement as required by 924(a)(1)(A), thus Count II fails to state a claim. I. COUNT I OF THE COMPLAINT FAILS TO SATISFY THE PARTICULARITY REQUIREMENT OF 18 U.S.C. § 924(d)(2)(c) 18 U.S.C. § 924(d)(2)(c) provides: Only those firearms or quantities of ammunition particularly named and individually identified as involved in or used in any violation of the provisions of this chapter or any rule or regulation issued thereunder, or any other criminal law of the United States or as intended to be used in any offense referred to in paragraph (3) of this subsection, where such intent is demonstrated by clear and convincing evidence, shall be subject to seizure, forfeiture, and disposition. (Emphasis added.) Count I alleges that the Defendant firearms and ammunition were “intended to be used” in offenses in § 922(d). Complaint ¶ 32. While the Complaint alleges violations related to a handful of other firearms and ammunition, it fails to allege how a single one of the 206 firearms and 41,725 rounds of ammunition sought to be forfeited were intended to be used in the alleged violations of § 922(d), or how they were involved and/or used in a willful violation. Indeed, the Complaint is void of details relating to which, if any, of the seized firearms or how much of the / / / / / / Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 10 of 22 Page ID #:202 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Specific reference is made to the unlawful sales of a Hi-Point Model C9 9mm 9 pistol, ¶ 19 & 21, but it is unclear if they were actually transferred. No specific reference is made to the sale of defendant ammunition in the Complaint. The repealed provision stated: “Any firearm or ammunition involved in or used 10 or intended to be used in, any violation of the provisions of this chapter or any rule or regulation promulgated thereunder, or any violation of any other criminal law of the United States, shall be subject to seizure and forfeiture . . . .” P.L. 90-618, § 102, 82 Stat. 1213, 1224 (1968). 5 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS ammunition was involved in any unlawful transfer.9 Current § 924(d) was enacted as part of the Firearms Owners' Protection Act, P.L. 99-308, 100 Stat. 449, 457-58 (1986) (“FOPA”). FOPA limits firearm and ammunition forfeitures to those “involved in or used in” certain knowing or willful violations, and to those “intended to be used” in specified offenses “where such intent is demonstrated by clear and convincing evidence.” 18 U.S.C. § 924(d)(1). It repealed portions of the Gun Control Act of 1968 that authorized a far broader standard of forfeiture.10 Before FOPA, there was a split in the circuits on the specificity required for forfeitures under the “intended to be used” element. United States v. One Assortment of Seven Firearms, 632 F.2d 1276, 1278 (5th Cir. 1980), upheld the forfeiture of seven firearms which a clerk sold to a nonresident but which had not actually been transferred yet. Even so, the intent for those transactions was not transferred to other firearms in inventory: But the statutory provision does contain limiting language. The firearms, to be subject to forfeiture, must be reasonably identified to the violation, or in this case, to the sale. By holding that identification is a necessary indicator of intent, we give meaning to the words “intended to be used in . . . any violation,” while ensuring that portions of a firearm dealer's inventory that are unrelated to a given violation are not swept away by enforcement officers. Id. at 1279. By contrast, United States v. Eighty-Six Firearms & Twenty-Two Rounds of Ammunition, 623 F.2d 643 (10th Cir. 1980), took a sweeping view of “intended to be used” which FOPA would disapprove. In that case, a dealer unlawfully sold Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 11 of 22 Page ID #:203 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “There was no Senate Report on Pub.L. No. 99-308. S.Rep. No. 98-583 11 accompanied S. 914, the substantially similar predecessor to S. 49, the Senate bill which was the basis for Pub.L. No. 99-308.” National Rifle Ass'n v. Brady, 914 F.2d 475, 477 n.1 (4th Cir. 1990). House Report No. 495, 99th Cong., 2d Sess. 13 (1986), reprinted in 1986 U.S. 12 Code Cong. & Admin. News 1327, 1339, argued that the provision was stricter than the Fourth Amendment: 6 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS handguns to undercover agents on two occasions, and discussed long gun sales but did not transfer any. In ordering forfeiture of the entire inventory, the opinion failed to include any statutory analysis of note, but did point out: “The government's burden is to establish its case by a preponderance of the evidence.” Id at 644. FOPA repudiated this decision in § 924(d)(2)(c) by imposing the particularity requirement and by requiring firearms “intended to be used” in specified offenses to be forfeited only “where such intent is demonstrated by clear and convincing evidence.” Senate Report 98-583, 98th Cong., 2d Sess., 24 (1984), explained the11 FOPA revisions as intending to preclude forfeiture of entire inventories as follows: During its hearings the Committee has received considerable evidence of misuse of existing, overly broad powers to confiscate and forfeit firearms. . . . For instance, in cases where a collector or dealer was alleged to have sold a small number of firearms improperly - often without illicit intent - enforcing agents confiscated entire collections or inventories. FOPA addressed the above by requiring the knowing and willful standards for violations, the requirement of clear and convincing evidence for the “intended to be used” element, and the following: Finally, under proposed 18 U.S.C. 924(d)(2)(c), only those firearms particularly and individually identified as used, involved in or, in certain cases, intended to be used in a violation of Chapter 44, regulations issued thereunder, or any other Federal criminal law, may be seized or forfeited. This is intended both to prevent the issuance of general warrants, leaving it to the executing agents to decide which firearms meet the general criteria of use or involvement, and also to prevent wholesale forfeiture of collections or inventories upon a claim of general intent to use them illegally. These are protections designed to safeguard Fourth Amendment rights.12 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 12 of 22 Page ID #:204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 A potentially significant problem is that the authority to seize and forfeit is limited only to firearms or quantities of ammunition "particularly named and individually identified as involved in or used in" specified violations of law. . . . This is narrower than interpretations of the Fourth Amendment requirement that a warrant "particularly" described the place to be searched and the persons or things to be seized . . . . The Senate report wrongfully cites 1,922 as 1,992.13 7 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS Id. at 25-26. Senate Report 97-476, 97th Cong., 2d Sess., 23 (1982), added that the above protections “are measures which the judiciary has begun to accept as necessary; they are appropriate for recognition by our constitutional system. See generally United States v. 1,992 Assorted Firearms, supra . . . .” United States v. 1,922 Assorted Firearms, 330 F. Supp. 635 (E.D. Mo. 1971) , held: “There is not the slightest evidence that any of the 1,922 firearms or13 the 229,553 rounds of ammunition sought to be forfeited had ever been used by Orphant [the licensed dealer] or anyone else in violation of law.” Id. at 637. The government argued that the licensee "intended" to use the firearms in violation of law. A store clerk, unbeknownst to the owner, made illegal sales. Id. at 638. While the few firearms actually sold were “involved in” a violation of the Act and should be forfeited, “the issue is whether all other guns and ammunition in the dealer's possession should be forfeited on the theory that they were ‘intended for use’ in violation of law.” Id. at 639. A small number of sales to non-residents did not suffice to forfeit the entire inventory: “Although these few sales may well have been unlawful under the statute, we hold that whether considered alone or in conjunction with other violations shown by the evidence such sales do not justify our finding as a fact that Orphant's inventory of guns and ammunition was possessed by him with intent that it be used in violation of law.” Id. at 640. Even if certain sales violated state law, “such violation does not reasonably lead to the conclusion that Orphant either used or intended to use his entire stock of guns or Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 13 of 22 Page ID #:205 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 With chattels, “each having a separate identity, there is in law no such 14 commingling of the whole as that the proof of illegal intention as to part of the goods taints others as to which no such intention is shown.” One-Gallon Paraffined Tin Cans, 260 F.2d at 107. Where “the whole stock could be sold and used for legitimate purposes but that a considerable portion of it was so sold and used, it cannot, we think, be held that the mere proof of an intention to sell some of the chattels for illegal purposes could be imputed to others of the chattels as to which the clear intention to so sell and use them is not shown.” Id. 8 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS ammunition in violation” of state law. Id. at 641. An entire inventory could be forfeited if an unlicensed dealer displayed them all for sale, since they were all intended to be used in violation of the Act. Id. at 642, citing United States v. One Assortment of 12 Rifles and 21 Handguns, 313 F. Supp. 641 (N.D. Fla. 1970). (Emphasis added.) None of the seized firearms, however, were used or intended to be used in violation of law. Id. 1,922 Assorted Firearms noted the underlying rule that “where the forfeiture claimed is not of fungibles but of chattels, each having a separate identity, mere proof of an intention to sell some of the chattels for illegal purposes may not be imputed to others of the chattels as to which no clear intention to so sell and use them is shown.” Id., citing United States v. 2265 One-Gallon Paraffined Tin Cans, 260 F.2d 105 (5th Cir. 1958). This is the rule FOPA enacted in § 924(d)(2)(c).14 Applying FOPA, United States v. Fifty-Two Firearms, 362 F. Supp.2d 1308 (M.D. Fla. 2005), held that the complaint failed to show probable cause to forfeit an entire inventory on the basis that the dealer sold a specific type of shotgun to a felon, as “there is insufficient cause to believe that Holt also intended to sell some or all of the 52 guns to a convicted felon.” Id. at 1313-14. However, the dealer was unlicensed, and the firearms were subject to forfeiture because they were intended to be sold while engaged in the firearms business without a license. Id. at 1315. The government's forfeiture claim is based on the premise that a handful of transfers somehow implies that the entire inventory was tainted though involvement in a wholly unlawful business. By analogy, United States v. Rutgard, Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 14 of 22 Page ID #:206 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 “The actually-proved instances of fraudulent pretense of medical necessity for 15 cataract surgery are a tiny fraction of a practice that did thousands of cataract surgeries.” Id. at 1289. Cf. United States v. Hanley, 190 F.3d 1017, 1026 (9th Cir. 1999) (allowing 16 conviction if the business “in its entirety was a fraudulent enterprise”). Count I is the only count that seeks forfeiture of 190 of the total 206 firearms.17 Count I is the only count that seeks forfeiture of the 41,725 rounds of 18 ammunition. 9 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS 116 F.3d 1270 (9th Cir. 1997), held that some instances of fraud by an eye doctor did not taint all of the proceeds of the medical practice for purposes of the money-laundering statute. “To prove its case here the government had the burden of showing that there were no medically necessary, properly billed surgeries.” Id.15 at 1290. See United States v. Yagman, 502 F. Supp.2d 1084, 1087, 1089 (C.D. Ca. 2007) (“the government must trace each of the alleged monetary transactions to criminally-derived proceeds;” presumption of taint held to be “mere speculation”).16 Here, the Complaint fails to allege with any specificity that every firearm and every round of ammunition sought to be forfeited, or that any of them, was held for unlawful purposes and not for lawful sales. Instead, the Complaint alleges a tiny number of unlawful firearm transfers not involving the enormous inventory it seeks to forfeit. None of the counts in the Complaint measure up to the above standards. Contrary to the particularly requirements of § 924(d)(2)(C), the Complaint alleges no nexus between the unlawful transactions - specific instances of which were negligible - and the 206 firearms and 41,725 rounds of ammunition sought to be17 18 forfeited. Accordingly, the First Count fails to state a claim on which relief can be granted and should be stricken and the property returned. / / / Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 15 of 22 Page ID #:207 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Congress rejected a bill that would have defined predicate crimes in part as 19 crimes “determined by the laws of the State to be a felony,” opting for the enacted version which “avoids potential difficulties arising out of the fact that States may define the term ‘felony’ differently.” Small v. United States, 544 U.S. 385, 393, 125 S. Ct. 1752, 161 L. Ed.2d 651 (2005). 10 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS II. THE COUNT I REFERENCES TO “CONVICTED FELONS” ARE INSUFFICIENT TO ALLEGE VIOLATION OF § 922(d) Count I of the Complaint is replete with references to the term “convicted felon.” ¶¶ 16, 17, 19, and 31. The term is used to allege that Claimant and his employees knew or had reason to believe that they were selling firearms to prohibited persons in violation of 18 U.S.C. § 922(d) and thus that the entire inventory should be forfeited. Absent a proper legal meaning, the term “convicted felon” must be excised from the Complaint, in which case Counts I is insufficient to allege claims. The term “felon” does not appear in 18 U.S.C. § 922(d). Instead, among other disabilities, that provision refers to a person who “has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year . . . .” 19 That term is defined to exclude numerous categories of persons in § 921(a)(20): The term “crime punishable by imprisonment for a term exceeding one year” does not include - (A) any Federal or State offenses pertaining to antitrust violations, unfair trade practices, restraints of trade, or other similar offenses relating to the regulation of business practices, or (B) any State offense classified by the laws of the State as a misdemeanor and punishable by a term of imprisonment of two years or less. What constitutes a conviction of such a crime shall be determined in accordance with the law of the jurisdiction in which the proceedings were held. Any conviction which has been expunged, or set aside or for which a person has been pardoned or has had civil rights restored shall not be considered a conviction for purposes of this chapter, unless such pardon, expungement, or restoration of civil rights expressly provides that the person may not ship, transport, possess, or receive firearms. Mere knowledge that a person was convicted of a “felony” does not inform one that § 922(d) applies. Having been “convicted in federal court and sentenced to more than a year's imprisonment . . . would not have shown whether his previous Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 16 of 22 Page ID #:208 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 E.g., United States v. Dahms, 938 F.2d 131, 133 (9th Cir.1991) (a convicted 20 person who regains “the rights to vote, to sit on a jury and to hold public office in the state in which he was originally convicted has had his rights substantially restored under § 921(a)(20).”); United States v. Simpson, 442 F.3d 737, 738 (9th Cir. 2006) (defendant who had his civil rights restored under Arizona law was not a prohibited person); United States v. Valerio, 441 F.3d 837, 839 (9th Cir. 2006) (expunged convictions “disappear for purposes of determining whether subsequent possession of a gun is a federal crime”). 11 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS conviction was for one of the business offenses that do not count, under §921(a)(20).” Old Chief v. United States, 519 U.S. 172, 192 n.10, 117 S. Ct. 644, 136 L. Ed.2d 574 (1997). Foreign convictions do not count at all. Small, 544 U.S. at 394. “The exemption clause does not simply say that a person whose civil rights have been restored is exempted from § 922(g)’s firearms disqualification. It says that the person's conviction shall not be considered a conviction.” Beecham v. United States, 511 U.S. 368, 372, 114 S. Ct. 1669, 128 L. Ed. 2d 383 (1994).20 United States v. Fifty-Two Firearms, 362 F. Supp.2d 1308, 1314 (M.D. Fla. 2005), dismissed a forfeiture action in part because it alleged transfers to a “convicted felon” without alleging that it was a disqualifying offense: [T]he amended verified complaint stops short of providing probable cause to believe that the informant who bought the firearm had in fact been convicted of a “felony” as Congress has narrowly defined that term for forfeiture purposes. The complaint alleges simply that the informant “was a convicted felon.” . . . The complaint says nothing about the type of felony for which he was convicted, or the manner of conviction. It may be that the informant “was a convicted felon” because he was adjudicated guilty on a plea of nolo contendere to a charge that he engaged in unfair trade practices, for example - a felony conviction that is insufficient for conviction and for forfeiture. Moreover, § 922(d) ends with the following language: “This subsection shall not apply with respect to the sale or disposition of a firearm or ammunition to a licensed importer, licensed manufacturer, licensed dealer, or licensed collector who pursuant to subsection (b) of section 925 of this chapter is not precluded from dealing in firearms or ammunition, or to a person who has been granted relief from disabilities pursuant to subsection (c) of section 925 of this chapter.” Merely Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 17 of 22 Page ID #:209 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Section 922(d) provides in part:21 It shall be unlawful for any person to sell or otherwise dispose of any firearm or ammunition to any person knowing or having reasonable cause to believe that such person - (1) is under indictment for, or has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year; (2) is a fugitive from justice; (3) is an unlawful user of or addicted to any controlled substance (as defined in section 102 of the Controlled Substances Act (21 U.S.C. 802)); (4) has been adjudicated as a mental defective or has been committed to. any mental institution; 12 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS alleging that a person is a “convicted felon” fails to inform one that a person is prohibited under § 922(d). In sum, the references to “convicted felon” in Counts I leaves that count inadequate, as a matter of law, as a basis for forfeiture. III. THE COMPLAINT FAILS TO ALLEGE SPECIFIC ELEMENTS The Counts I and II of the Complaint primarily cite subsection numbers instead of alleging elements. The general subsections cited contain numerous paragraphs defining different forfeiture predicates, but the specific paragraphs intended are not alleged. This is insufficient to allege the elements required for forfeiture. COUNT I. Count I of the Complaint alleges that “the defendant firearms and ammunition were intended to be used by the transferor of the firearm or ammunition . . . in one or more offenses described in 18 U.S.C. § 922(d) and are, therefore, subject to forfeiture pursuant to 18 U.S.C. § 924(d).” Complaint ¶ 32. This allegation is inadequate in that both § 922(d) and § 924(d) contain numerous differing elements which could be the basis of forfeiture and this fails to give adequate notice of which provisions are being alleged. Court I fails to inform which of the more than nine prohibited categories of § 922(d) is being alleged, or which firearms and ammunition were intended to be used in which offenses.21 Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 18 of 22 Page ID #:210 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 (5) who, being an alien - (A) is illegally or unlawfully in the United States; or (B) except as provided in subsection (y)(2), has been admitted to the United States under a nonimmigrant visa (as that term is defined in section 101(a)(26) of the Immigration and Nationality Act (8 U. S. C. 1101(a)(26))); (6) who has been discharged from the Armed Forces under dishonorable conditions; (7) who, having been a citizen of the United States, has renounced his citizenship; (8) is subject to a court order that restrains such person from harassing, stalking, or threatening an intimate partner of such person or child of such intimate partner or person, or engaging in other conduct that would place an intimate partner in reasonable fear of bodily injury to the partner or child . . . ; or (9) has been convicted in any court of a misdemeanor crime of domestic violence. 13 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS Similarly, Count I fails to inform which of the many provisions of 18 U.S.C. § 924(d) is being relied on for the forfeiture, or which firearms and ammunition were intended to be used in which predicates. Section 924(d)(1) provides in part: Any firearm or ammunition involved in or used in any knowing violation of subsection (a)(4), (a)(6), (f), (g), (h), (I), (j), or (k) of section 922, or knowing importation or bringing into the United States or any possession thereof any firearm or ammunition in violation of section 922(l), or knowing violation of section 924, or willful violation of any other provision of this chapter or any rule or regulation promulgated thereunder, or any violation of any other criminal law of the United States, or any firearm or ammunition intended to be used in any offense referred to in paragraph (3) of this subsection, where such intent is demonstrated by clear and convincing evidence, shall be subject to seizure and forfeiture . . . . (Emphasis added.) The above is only part of § 924(d), which the Complaint alleges is the basis for forfeiture. In sum, Count I fails to inform specifically which of the many provisions of § 922(d) is being alleged, or to specify which firearms and ammunition were intended to be used in which offenses. / / / / / / Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 19 of 22 Page ID #:211 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS COUNT II. 18 U.S.C. 923(g) requires each Federal Firearm Licensee (“FFL”) to report the theft/loss of a firearm from the licensee's inventory; though an FFL who reports a firearm as missing and later discovers its whereabouts is not required to notify the ATF that the firearm(s) have been located. The Complaint alleges that on “July 6, 2008, the San Bernardino County Sheriff's Department responded to an alarm . . . the firearms business had been broken into and a number of firearms stolen. ¶ 23. The Complaint further alleges that the “FFL filed a 3310.11 (Federal Firearms Licensee Theft/Loss Report) with ATF” and listed five firearms as stolen, which were not stolen, but were later “recovered by ATF” during the execution of their warrants. Id. Count II states that Claimant “made a false statement or representation in the records required by the GCA to be maintained by a federal firearms licensee in violation of 18 U.S.C. § 924 (a)(1)(A).” ¶ 34. Nothing in Count II alleges facts that Claimant or his employees knowingly made such false statements or representation in the records. Rather, the Complaint merely provides a conclusory allegation that the five firearms were “involved in a knowing violation of 18 U.S.C. § 924 (a)(1)(A).” ¶ 34. Further, Count II fails to inform which of the several forfeiture predicates of § 924(d) are being alleged. For the above reasons, Counts I and II fail to state a claim for forfeiture and should be dismissed. / / / / / / / / / Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 20 of 22 Page ID #:212 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS CONCLUSION The Complaint should be stricken in part for failure to meet the particularity requirements of Rules G(2)(f) and E(2)(a), Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. In addition, judgment should issue to defendants on the pleadings pursuant to Rule 12(c), Federal Rules of Civil Procedure, for failure to state a claim upon which relief can be granted with regard to Counts I and II. Dated: July 7, 2010 Respectfully submitted, DAVIS & ASSOCIATES /s/ Jason A. Davis Jason@CalGunLawyers.com Attorneys for Claimant Stephen Mitchell Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 21 of 22 Page ID #:213 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 16 MEMORANDUM IN SUPPORT OF MTN TO STRIKE & MTN FOR JUDGMENT ON THE PLEADINGS PROOF OF SERVICE IT IS HEREBY CERTIFIED THAT: I, the undersigned, am a citizen of the United States and am at least eighteen years of age. My business address is 27281 Las Ramblas, Suite 200 Mission Viejo, CA 92691. I am not a party to the above-entitled action. I have caused service of: MEMORANDUM IN SUPPORT OF MOTION TO STRIKE AND MOTION FOR JUDGMENT ON THE PLEADINGS on the following party by electronically filing the foregoing with the Clerk of the District Court using its ECF System, which electronically notifies them. Steven R Welk AUSA - Office of US Attorney Asset Forfeiture Division 312 North Spring Street 14th Floor Los Angeles, CA 90012 Email: USACAC.Criminal@usdoj.gov Steven Dennis Lucas 13554 Chesire St Victorville CA 92392 VIA US MAIL Pablo Perez 12033 Cottonwood Ave, Apt #4 Hesperia CA 92345 VIA US MAIL Steven Michael Luas 15475 Rodeo Rd Hesperia CA 92345 VIA US MAIL Phillip Reef 15252 Seneca Rd #282 Victorville CA 92392-2275 VIA US MAIL I declare under penalty of perjury that the foregoing is true and correct. Executed on July 7, 2010. /s/ Jason A. Davis Case 2:09-cv-09235-MMM-AGR Document 34 Filed 07/07/10 Page 22 of 22 Page ID #:214