United States v. $107,900.00 U.S. Currency Seized ( 2019 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 19a0561n.06
Case No. 18-4042
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
FILED
Nov 06, 2019
UNITED STATES OF AMERICA, ) DEBORAH S. HUNT, Clerk
Plaintiff-Appellee, )
)
v. ) ON APPEAL FROM THE
) UNITED STATES DISTRICT
$99,500.00 U.S. CURRENCY SEIZED ) COURT FOR THE
ON MARCH 20, 2016; $107,900.00 ) NORTHERN DISTRICT OF
U.S. CURRENCY SEIZED ON JUNE ) OHIO
17, 2016; and $57,999.00 U.S. )
CURRENCY SEIZED ON AUGUST )
18, 2016, )
)
Defendants, )
)
SAMSON PRIMM, )
Claimant-Appellant. )
BEFORE: BOGGS, BATCHELDER, and DONALD, Circuit Judges.
BERNICE BOUIE DONALD, Circuit Judge. Samson Primm wants to
proceed on a claim to the defendant monies that are now the subject of this
governmental forfeiture action. But because Primm no longer has a colorable
Case No. 18-4042, United States v. $99,500 in U.S. Currency Seized, et al.
ownership, possessory, or security interest in at least a portion of the defendant
properties, the district court dismissed his claim on summary judgment for lack of
Article III standing. We affirm.
I.
This civil-forfeiture action involves three defendant properties seized by law-
enforcement officers and Primm’s asserted interests in said properties. The United
States filed this forfeiture action on October 3, 2016, pursuant to 21 U.S.C.
§881(a)(6), against the defendant properties—namely, $99,500; $107,900; and
$57,999 in U.S. currency seized by law enforcement on March 20, 2016; June 17,
2016; and August 18, 2016, respectively. The government alleged that the defendant
properties constitute proceeds from illegal drug trafficking, were furnished or
intended to be furnished in exchange for illegal drugs, and/or were used or intended
to be used to facilitate illegal drug-trafficking activities.
In response to the action, Primm filed a verified claim “assert[ing] his
absolute[] and unqualified[] ownership interest[] and his unqualified right (and
entitlement) to, and in,” the defendant properties and stating that he was “in sole[]
and exclusive possession” of these monies when they were seized. He also filed a
separate answer that claimed sole ownership and exclusive possession of the
properties when they were seized from him but, notably, denied all of the
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government’s pertinent allegations regarding the seizures thereof, including that the
monies were taken from his possession and that he won some of it while gambling.
The United States moved to strike both claims, arguing that Primm made only
bald assertions of ownership insufficient to meet the statutory requirements of Rule
G of the Federal Rules of Civil Procedure’s Supplemental Rules for Admiralty or
Maritime Claims and Civil Forfeiture Actions. United States v. $99,500.00 U.S.
Currency, 699 F. App’x 542, 542 (6th Cir. 2017). The district court granted the
motion to strike, and Primm appealed. Id. Relying on our decision in United States
v. $31,000.00 in U.S. Currency, 872 F.3d 342 (6th Cir. 2017) [hereinafter $31,000.00
I], we reversed the district court’s holding, reasoning that Primm’s verified claim of
ownership was sufficient to satisfy Article III standing requirements and the
procedural requirements of Rule G at the pleading stage. United States v. $99,500.00
U.S. Currency, 699 F. App’x at 543-44. We then remanded the matter back to the
district court. Id. at 544.
On remand, the district court held a case-management conference, where it
set deadlines for discovery and dispositive motions. On January 25, 2018, the United
States timely served special interrogatories and requests for production of documents
to Primm’s counsel. The discovery sought information about the nature of Primm’s
interest in the defendant monies, the source of the defendant monies, and Primm’s
legitimate sources of income, if any. Primm did not respond to the discovery
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requests and, instead, filed an “Opposition to Government’s First Set of
Interrogatories and Request for Production of Documents.” In his opposition,
Primm argued that he was not required to respond to the requests until the United
States survived his motion to suppress and proved that the defendant monies are
subject to forfeiture. Primm also attached an affidavit asserting his Fifth
Amendment right in response to the requests but also implying (in conjunction with
his opposition) that he reserved the right to supplement his responses after the district
court ruled on his motion to suppress and determined forfeitability of the seized
properties.
On March 9, 2018, the district court entered an order explaining that Primm’s
assertions were not supported by law and that discovery would proceed as scheduled.
The district court also ordered Primm to clarify whether he was making a blanket
refusal to answer to the United States’ discovery requests based upon his Fifth
Amendment privilege against self-incrimination or if he intended to respond to the
outstanding requests. In response, Primm stated that he was not making a “blanket
refusal” and that he would respond to any question that would not tend to incriminate
him. Primm ended his response, however, by once again suggesting that he did not
need to respond to any discovery requests until after the government proves that the
monies at issue were lawfully seized and forfeitable.
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With Primm still not responding to the discovery requests, the government
filed a motion to compel Primm’s responses to the outstanding discovery, which the
district court granted on April 20, 2018, and ordered Primm to respond to the
requests by April 27, 2018. Again, Primm did not respond. Accordingly, the United
States, pursuant to Fed. R. Civ. P. 37(b)(2)(A), moved to strike Primm’s claim and
his answer for failing to respond to its discovery requests. At that point, Primm
responded in opposition by stating that he had all along asserted his Fifth
Amendment privilege in response “to all questions put to him, and, [that] he will
continue to do so”; he also asserted his Fifth Amendment privilege in reference to
his being compelled to produce any documents. With it then clear that Primm was
asserting his Fifth Amendment response to all discovery, the district court denied
the government’s motion to strike.
Thereafter, the United States filed a motion for summary judgment on the
issue of standing, arguing that the district court should strike Primm’s verified claim
and answer, along with the naked assertions of ownership therein, based upon
Primm’s failure to respond to discovery requests aimed at determining the
legitimacy of his claimed ownership interests. Primm opposed the relief sought and
filed a cross-motion for summary judgment. The United States then filed, as one
document, a reply to its own motion and a response to Primm’s motion. Upon
consideration, the district court struck Primm’s conclusory assertions of ownership
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in his verified claim and answer, granted the United States’ motion for summary
judgment on the issue of standing based on Primm’s failure to satisfy Article III, and
denied Primm’s motion for summary judgment.1
II.
“Generally, we review ‘a district court’s decision to strike a claim in an in rem
forfeiture action for an abuse of discretion.’” $31,000.00, 872 F.3d at 347 (quoting
United States v. One 2011 Porsche Panamera, 684 F. App’x 501, 506 (6th Cir.
2017)). We review de novo, however, “‘[a] district court’s determination of a
claimant’s standing to contest a federal forfeiture action.’” Id. (quoting United
States v. Real Prop. Located at 4527-4535 Mich. Ave., Detroit, Mich., 489 F. App’x
855, 857 (6th Cir. 2012)). Moreover, this Court reviews a district court’s grant of
summary judgment de novo. Bormuth v. Cty. of Jackson, 870 F.3d 494, 503 (6th
Cir. 2017) (en banc).
III.
We hold that the district court did not err in finding that Primm failed to meet
his burden of establishing Article III standing at the summary-judgment stage of the
proceeding below. In challenging the district court’s summary-judgment ruling in
1
Although the United States filed a motion for summary judgment on June 5, 2018, the
district court, thereafter, granted it leave to file a motion for summary judgment on the
issue of standing. The latter motion is what the district court relied on in dismissing
Primm’s claims and is the subject of this appeal.
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favor of the United States, Primm makes three primary arguments: (A) the lower
court’s ruling goes against the law of the case; (B) the lower court improperly drew
an adverse inference against him based on his invocation of the Fifth Amendment
right against self-incrimination; and (C) the lower court improperly sanctioned him
for his invocation of the right against self-incrimination, because Fed. R. Civ. P.
26(b)(1) and (b)(5) limit the scope of discovery to matters “not privileged.”
A.
Addressing Primm’s first argument, we hold that the district court, in finding
that Primm lacked standing at summary judgment, did not go against the law of the
case. The law-of-the-case doctrine “provides that courts’ earlier decisions ‘should
continue to govern the same issues in subsequent stages in the same case.’” In re
Blasingame, 920 F.3d 384, 392 (6th Cir. 2019) (quoting Musacchio v. United States,
136 S. Ct. 709, 716 (2016)). The rule applies after a case is remanded to a trial court
by an appellate court. United States v. Twp. of Brighton, 282 F.3d 915, 919 (6th Cir.
2002).
In regard to Primm’s standing in this matter, this court previously ruled that
Primm’s verified claim of ownership was sufficient to satisfy Article III standing
requirements and the procedural requirements of Rule G at the pleading stage.
$99,500.00 U.S. Currency, 699 F. App’x at 544. The district court’s most recent
Article III determination, however, was not made at the pleading stage. On remand,
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the district court held a case-management conference and set deadlines for discovery
and dispositive motions before ruling at the summary-judgment stage of the
proceedings that Primm did not have Article III standing. United States v. $99,500
in U.S. Currency, 339 F. Supp. 3d 690, 693, 700 (N.D. Ohio 2018).
This Court’s determination of whether Primm met his burden of establishing
Article III standing and the requirements of Rule G at the pleading stage, did not
preclude the United States from arguing, or the district court from ruling, that he
failed to show Article III standing on summary judgment. United States v.
$31,000.00 in U.S. Currency, 774 F. App’x 288, 292-93 (6th Cir. 2019) [hereinafter
$31,000.00 III]. Indeed, at no point has this court held that Primm has standing for
summary-judgment purposes. Thus, Primm’s first argument is without merit.
B.
Primm’s argument that the lower court improperly drew an adverse inference
against him because of his invocation of his Fifth Amendment privilege against self-
incrimination also lacks merit. In ruling on the United States’ summary-judgment
motion below, the district court stated as follows:
Claimant does not address the government’s argument that the Court
should strike his naked assertion of ownership because he failed to
answer any discovery directed at determining the legitimacy of that
assertion. Instead, he argues that the Court cannot draw an adverse
inference from the assertion of the privilege. Because the government
has not asked for an adverse inference, the Court need not address this
argument.
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$99,500 in U.S. Currency, 339 F. Supp. 3d at 697 n.4. As evidenced by the above
excerpt, and through the remainder of the district court’s opinion, the court below
did not consider, let alone make, any adverse inferences as a result of Primm
invoking his right against self-incrimination.
To be certain, the district court struck Primm’s conclusory assertions of
ownership in his verified claim and answer, leaving him with an unexplained claim
of possession. Id. at 697-700. As found by the district court, such an unexplained
claim of possession is insufficient to meet the burden of establishing Article III
standing at the summary-judgment stage.2 See United States v. $677,660.00 in U.S.
Currency, 513 F. App’x 531, 532 (6th Cir. 2013) (per curiam); see also United States
v. $ 515,060.42 in U.S. Currency, 152 F.3d 491, 498 (6th Cir. 1998). Thus, although
the district court struck Primm’s conclusory assertions of ownership, the district
court did not draw any adverse inferences as a result of Primm’s invocation of his
right against self-incrimination.
C.
Moreover, we find no merit in Primm’s argument that the district court abused
its discretion by striking his assertions of ownership from his verified claim and
2
Although Primm makes a cursory argument that the facts relied upon by the United States
in support of its motion for summary judgment on the issue of standing were insufficient
to carry its burden of proof, we do not reach this issue, as Primm never met his threshold
burden of establishing Article III standing.
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answer, which he frames as an improper imposition of a sanction based on a rightful
assertion of a privilege, in violation of Fed. R. Civ. P. 26. “As in any federal suit, a
claimant must have Article III standing” in an in rem civil forfeiture proceeding.
$31,000.00 I, 872 F.3d at 348. The burden to show standing in such matters is on
the claimant. Id. Courts assess “Article III standing in civil forfeiture cases by
requiring that ‘a claimant must have a colorable ownership, possessory[,] or security
interest in at least a portion of the defendant property.’” Id. (quoting $515,060.42 in
U.S. Currency, 152 F.3d at 497). At the summary-judgment stage, a claimant must
“present ‘some evidence of ownership’ beyond the mere assertion of an ownership
interest in the property.” United States v. $31,000 in U.S. Currency, No. 1:16 CV
1581, 2018 U.S. Dist. LEXIS 86656, at *11–12 (N.D. Ohio May 23, 2018)
[hereinafter $31, 000.00 II] (citing United States v. Phillips, 883 F.3d 399, 403 (4th
Cir. 2018)).
Below, the United States filed a motion for summary judgment on the issue
of standing, requesting that the district court strike Primm’s verified claim and
answer, along with the naked assertions of ownership therein, based upon Primm’s
failure to respond to discovery requests aimed at determining the legitimacy of his
claimed ownership interests. In other words, the United States argued that the
district court should strike Primm’s conclusory assertions of ownership that came as
a result of Primm freely responding to questions that were advantageous to his cause,
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given that he, thereafter, made a blanket invocation of his Fifth Amendment right to
avoid answering questions relevant to his ownership assertions.
The district court, finding merit in the argument, struck Primm’s assertions of
ownership. As held by the district court below, as well as this court and our sister
circuits, where a claimant seeks to use the Fifth Amendment to abuse or obstruct the
discovery process, trial courts may, to prevent prejudice to opposing parties, adopt
remedial procedures or impose sanctions, which includes striking claims of
ownership in a verified claim or answer. $31,000.00 III, 774 F. App’x 288, 291-92;
see $99,500 in U.S. Currency, 339 F. Supp. 3d at 697-99 (discussing cases). The
reason why courts do so, in such circumstances, is that the claimants’ claim of
privilege “raises the core concern” that their testimony could furnish them with what
may be false evidence and prejudice the government by depriving it of any means
of detecting the falsity. $99,500 in U.S. Currency, 339 F. Supp. 3d at 698-99
(quotation omitted) (quoting $31,000.00 II, 2018 U.S. Dist. LEXIS 86656, at *19);
see also United States v. $133,420.00 in U.S. Currency, 672 F.3d 629, 642 (9th Cir.
Feb. 21, 2012).
As seen here, striking Primm’s assertions of ownership left the record devoid
of any claim of ownership to the seized currency. With only an unexplained claim
of possession, Primm could not meet his burden of establishing standing at the
summary judgment stage. See $677,660.00 in U.S. Currency, 513 F. App’x at 532
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(per curiam); see also $ 515,060.42 in U.S. Currency, 152 F.3d at 498. Thus, the
district court did not abuse its discretion in striking Primm’s claim of ownership in
the defendant properties.
Regarding the remainder of Primm’s assertions challenging the validity of the
underlying seizures and forfeiture, the court finds no error in the district court not
considering the arguments, as Primm did not meet his threshold burden of showing
Article III standing.
IV.
Because Primm no longer has a colorable ownership, possessory, or security
interest in at least a portion of the defendant properties, he has not met his burden of
establishing standing under Article III, precluding him from proceeding on a claim
to the defendant monies.
We affirm.
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