Ashh, Inc. v. United States

Decision Date27 June 2022
Docket Number21-11210
PartiesASHH, INC., Plaintiff, v. UNITED STATES OF AMERICA, et al., Defendants.
CourtU.S. District Court — Eastern District of Michigan
OPINION AND ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

ROBERT H. CLELAND, UNITED STATES DISTRICT JUDGE.

Plaintiff ASHH, Inc. brings this action against the United States of America, United States Customs and Border Protection (CBP), three officers of the CBP, and ten unidentified current and former agents of CBP. Plaintiff asserts that Defendants, on four occasions, illegally seized and continue to detain Plaintiff's property. (ECF No. 1.) Plaintiff alleges that Defendants improperly characterized Plaintiff's products as “drug paraphernalia” under relevant federal and state law and accordingly seek the return of the property and damages. (Id.)

Before the court is Defendants' motion to dismiss. (ECF No. 14.) Defendants contend that Plaintiff's complaint must be dismissed either because the court lacks jurisdiction or the complaint otherwise fails to state a claim. Plaintiff filed a response (ECF No. 16), and Defendant replied. (ECF No. 17.) After a review of the parties' briefing and a status conference with the parties regarding the pertinent issues the court does not find a hearing to be necessary. E.D. Mich LR 7.1(f)(2). For the reasons set forth below, the court will grant Defendants' motion and dismiss the case.

I. BACKGROUND

The following facts are either alleged in Plaintiff's complaint or agreed upon by the parties. In considering a motion to dismiss, the court accepts Plaintiff's factual allegations as true but makes no overt finding as to truth or falsity. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).

Plaintiff is a Michigan corporation that manufactures and distributes products in the CBD and hemp markets, including “vaporizers, rolling papers, and packaging supplies.” (ECF No. 1, PageID.2.) Among their numerous products are a “glass bowl for smoking hemp-derived CBD,” a “durable and versatile hand pipe,” a “four piece grinding device for breaking down hemp-derived CBD and industrial hemp flower,” a “glass blunt,” and “hybrid devices” that include bongs and “quartz bangers.” (See ECF No. 1-2, PageID.37-44, 46.) Plaintiff, on four occasions, attempted to import a variety of its products into the United States; however, these shipments were seized by CBP after the government's determination that the products constituted “drug paraphernalia.” (ECF No. 1, PageID.8-13.)

On November 27, 2019, CBP seized Plaintiff's property in International Falls, Minnesota. (Id., PageID.8.) On March 31, 2020, Plaintiff responded to this seizure [b]y letter dated March 31, 2020, by filing a petition against the seizure stating that the products were not drug paraphernalia and therefore the seizure should be cancelled, and the goods released.” (Id., PageID.9.) Plaintiff's letter elaborated and averred that the seized items-the total value of which were appraised at $467,372.00-do not qualify as “drug paraphernalia” as defined in 21 U.S.C. § 863(d). (ECF No. 1-1, PageID.24; ECF No. 1-2.) Plaintiff alleges that this petition was timely submitted and remains outstanding. (ECF No. 1, PageID.10.)

On May 10, 2021, CBP notified Plaintiff that, on April 13, 2021, CBP seized another shipment of Plaintiff's products in Romulus, Michigan. (Id., PageID.11.) Similarly, on May 17, 2021, CBP informed Plaintiff that a third shipment had been seized on May 6, 2021; the majority of items seized in the May 6 shipment were “Lithium-ion batteries, which are describe[d] as the 18000 Ooze Slim Twist w/ Smart USB.” (Id., PageID.12.) Plaintiff's complaint states that, as to both of April 13 and May 6 seizures, it “is in the process of responding to the Notice of Seizure and Information to Claimants and will do so in a timely manner.” (Id.) The shipments were valued at $465,426.00 and $105,360.00, respectively. (ECF No. 1-3, PageID.55; ECF No. 1-4, PageID.63.) Plaintiff submitted its completed Election of Proceedings form as to the May 6 seizure on June 24, 2021; Plaintiff opted to proceed administratively and file a petition for remission as it did following the November 27 seizure. (ECF No. 14-1, PageID.140; ECF Nos. 14-7, 14-8.)

Finally, Plaintiff alleges that CBP seized a fourth shipment on May 10, 2021- three containers carrying thousands of its products. (ECF No. 1, PageID.13.) However, at the time it filed the instant complaint in late May 2021, Plaintiff had “not received the formal seizure notice for these containers.” (Id.) Plaintiff later received its Notice of Seizure as to this shipment on approximately June 21, 2021. (ECF No. 14-1, PageID.140; ECF No. 14-9, PageID.177.) Plaintiff again proceeded administratively by filing a petition pursuant to 19 U.S.C. § 1618. (ECF Nos. 14-10, 14-11.)

Plaintiff brings a six-count complaint. Counts I through IV invoke Federal Rule of Criminal Procedure 41(g) and request the return of property for each of the seized shipments. (Id., PageID.14-16.) Plaintiff claims that its property was not properly classified as drug paraphernalia or is otherwise exempt from detention and seizure. Count V requests review of CBP's agency action pursuant to the Administrative Procedure Act (“APA”), 5 U.S.C. § 702, arguing Defendants have exceeded their authority and that their actions are otherwise arbitrary and capricious. (Id., PageID.16-18.) Finally, Count VI avers that Defendants' seizures constitute a taking and seeks just compensation. (Id., PageID.19.)

II. STANDARD

Defendants' motion to dismiss implicates the standards of both Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6).

A. Rule 12(b)(1)

Rule 12(b)(1) permits parties to seek dismissal of claims for “lack of subjectmatter jurisdiction.” Such motions “fall into two general categories: facial attacks and factual attacks.” United States v. Ritchie, 15 F.3d 592, 598 (1994). For a facial attack, which concerns the legal sufficiency of the complaint, “the court must take the material allegations of the petition as true and construed in the light most favorable to the nonmoving party.” Id. (internal citation omitted).

For an attack against “the factual existence of subject matter jurisdiction[,] . . . no presumptive truthfulness applies to the factual allegations and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case.” Id. (internal citation omitted). [A] trial court has wide discretion to allow affidavits, documents and even a limited evidentiary hearing to resolve disputed jurisdictional facts.” Ohio Nat. Life Ins. v. United States, 922 F.2d 320, 325 (6th Cir. 1990). The [p]laintiff bears the burden of establishing that subject matter jurisdiction exists,” and factual findings made by the court to “are reviewed for clear error.” Cartwright v. Garner, 751 F.3d 752, 760 (6th Cir. 2014).

Here, Defendants purport initially to make a “facial attack,” but they have presented evidence “to provide context” to the court. (ECF No. 14, PageID.123.) They ask, alternatively, to construe the motion as a factual attack insofar as the court finds that the additional evidence is necessary to determine its jurisdiction. (Id.) Given the time that has passed since the filing of the complaint-and the significance of the documents before the court-the court will construe the motion as a factual attack.

B. Rule 12(b)(6)

Under Rule 12(b)(6), a party can move to dismiss a complaint for “failure to state a claim upon which relief can be granted.” When reviewing motions under Rule 12(b)(6), the complaint is viewed in the light most favorable to the plaintiffs, the allegations in the complaint are accepted as true, and all reasonable inferences are drawn in favor of the plaintiffs. Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008). “To survive a motion to dismiss, a complaint must contain factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.' Ashcroft, 556 U.S. at 678 (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “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.” Id. Determining plausibility is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679. The plaintiff must present “more than labels and conclusions.” Twombly, 550 U.S. at 545. [A] formulaic recitation of a cause of action's elements will not do.” Id.

When reviewing a motion to dismiss, the court “may not consider matters beyond the complaint.” Hensley Mfg. v. ProPride, Inc., 579 F.3d 603, 613 (6th Cir. 2009). However, the court may consider “documents incorporated into the complaint by reference . . . and matters of which a court may take judicial notice.” Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). The court may also consider “a document that is not formally incorporated by reference or attached to a complaint” when [the] document is referred to in the complaint and is central to the plaintiff's claim.” Greenberg v. Life Ins. Co. of Va., 177 F.3d 507, 514 (6th Cir. 1999).

III. DISCUSSION

Defendants advance their motion to dismiss on various grounds. As to Counts I through IV, Plaintiff's 41(g) claims, they argue that the court lacks jurisdiction. (ECF No. 14 PageID.124-28.) As to Count V's APA claim, Defendants move to dismiss because there are other adequate remedies and the agency actions at issue are not “final.” (Id., PageID.128-33.) Finally, Defendants maintain that Count VI, Plaintiff's takings claim, must be dismissed for either lack of jurisdiction...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT