Lawrence v. U.S. Dep't of the Treasury, Case No. 14cv594–WQH–NLS.

• Decision Date: 23 July 2014
• Docket Number: Case No. 14cv594–WQH–NLS.
• Citation: 34 F.Supp.3d 1140
• Parties: Randall LAWRENCE and Michael McConnell, Plaintiffs, v. UNITED STATES DEPARTMENT OF THE TREASURY; United States Bureau of the Mint; and the United States of America, Defendants.
• Court: U.S. District Court — Southern District of California

34 F.Supp.3d 1140

Randall LAWRENCE and Michael McConnell, Plaintiffs

v.UNITED STATES DEPARTMENT OF THE TREASURY; United States Bureau of the Mint; and the United States of America, Defendants.

Case No. 14cv594–WQH–NLS.

United States District Court, S.D. California.

Signed July 23, 2014.

Armen R. Vartian, Law Offices of Armen R. Vartian, Manhattan Beach, CA, for Plaintiffs.

U.S. Attorney CV, Joseph Patrick Price, Jr., Joseph J. Purcell, United States Attorney's Office, San Diego, CA, for Defendants.

ORDER

HAYES, District Judge:

The matter before the Court is the Motion to Dismiss the Complaint for Failure to State a Claim (“Motion to Dismiss”), filed by Defendants United States Department of the Treasury, United States Bureau of the Mint, and the United States of America. (ECF No. 3).

I. Background

On March 14, 2014, Plaintiffs Randall Lawrence and Michael McConnell initiated this action by filing a Complaint for Declaratory Judgment (“Complaint”) in this Court. (ECF No. 1).

A. Allegations of the Complaint

Plaintiffs are “the owners of a unique United States coin, a 1974–D Aluminum Cent.” Id. at 1. Hundreds of thousands of 1974 Aluminum Cents were minted, and at least dozens of these coins were handed out by the United States Mint to U.S. Government officials while attempting to persuade Congress to proceed with their use to replace copper

pennies in 1974. Congress ultimately decided to not adopt aluminum cents, and the U.S. Mint melted down most of the specimens that were still at the Philadelphia Mint facility, and collected a majority of those that had been distributed in Washington, D.C. to also be destroyed. The Government's records show that no one knows exactly how many aluminum cents were not recovered and are still in existence. “While it is rumored that only a dozen or so Aluminum Cents were minted at the Denver Mint, only Plaintiff's specimen is known to exist at this time.” Id. ¶ 9. The coins struck in Denver were intermingled with those manufactured in Philadelphia once they reached Washington, and were distributed in a similar manner. Although the U.S. Mint has claimed that no records exist indicating that any Aluminum Cents were authorized to be struck at the U.S. Mint's Denver facility, “the Denver Mint could not have made the Aluminum Cents without a specific order to do so.”Id. ¶ 38.

Plaintiff Lawrence is the son of the Harry Edmond Lawrence, “who served with distinction for approximately 20 years at the Denver Mint, predominantly in the assistant superintendent's position, retiring as assistant superintendent in 1980.” Id. ¶ 34. “Harry Lawrence was seconded to Washington, D.C. during 1974, and on information and belief he participated in the various hearings and meetings with Congressmen, Senators and their staff relating to the 1974 Aluminum Cent.” Id. “Harry Lawrence died in 1980, and Plaintiff Lawrence obtained the 1974–D aluminum cent that is the subject of this action along with his father's other personal property.” Id. ¶ 35.

On February 26, 2014, the Chief Counsel for the U.S. Mint sent Plaintiffs a letter demanding the return of their aluminum cent. The letter stated that the Government takes the position that, because Congress never issued an aluminum cent as legal tender, any aluminum cent remains property of the federal government, regardless of how long it has been in private hands. A similar letter was sent to the auction house engaged by Plaintiffs to sell the coin.

“Under the Government's theory, it has the legal basis to commence forfeiture proceedings against some of the most valued coins in the numismatic community, whether found in a public or private collection, or offered for sale.” Id. ¶ 57. “Such a circumstance would be a disaster for numismatists and the public generally. Collectors who acquired patterns and other non-legal tender coins in good faith from dealers, auction houses or other collectors, or as inheritances from other collectors in their families would be forced to prove that they are entitled to retain their coins. In many cases, collectors would be unable to overcome the Government's presumption that their coins were removed from the Mint improperly because records relating to specific coins that left the Mint decades or even a century ago are not available.” Id.

The Complaint alleges a single count for declaratory judgment. The Complaint requests “a declaratory judgment that the Government's claim to Plaintiffs' Aluminum Cent is invalid.” Id. ¶ 62.

B. Motion to Dismiss

On June 3, 2014, Defendants filed the Motion to Dismiss. (ECF No. 3). Defendants contend that the Complaint fails to state a claim upon which relief can be granted. Defendants contend that “[i]tems made at United States Mint facilities but not lawfully issued, or otherwise lawfully disposed of, remain Government property and are not souvenirs that United States Mint officials can remove and pass down to their heirs.... The item that Plaintiffs hoped to sell at auction as a '1974–D Aluminum Cent' is an unauthorized, unissued piece that was struck at the United States Mint at Denver and unlawfully removed from that facility.” (ECF No. 3–1 at 6). Defendants contend that Plaintiffs have not asserted any facts that would support any scenario under which they could plausibly be in lawful possession of the Aluminum Cent at issue. Defendants request that the Court take judicial notice of the letters sent from the Chief Counsel of the U.S. Mint to Plaintiffs and an auction company, a copy of U.S. Mint Regulations from 1970, and the Annual Report of the Director of the U.S. Mint in 1887. (ECF No. 3–2).

On July 3, 2014, Plaintiffs filed an opposition to the Motion to Dismiss. (ECF No. 8). Plaintiffs contend that dismissal is unwarranted because “[f]actual issues abound and ... the Government, to prove its case, must overcome some major obstacles, including the fact that for well over a century it has permitted and encouraged private ownership of non-issued coins just like the one in this case, which constitute most, if not all, of the most valuable collectible U.S. coins in existence.” (ECF No. 8 at 5). Plaintiffs oppose the request for judicial notice.

II. Standard of Review

The Motion to Dismiss is brought pursuant to Federal Rule of Civil Procedure 12(b)(6). Rule 12(b)(6) permits dismissal for “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). Federal Rule of Civil Procedure 8(a) provides that “[a] pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). Dismissal under Rule 12(b)(6) is appropriate where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory. See Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir.1988).

“[A] plaintiff's obligation to provide the ‘grounds' of his ‘entitle [ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.”

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Fed.R.Civ.P. 8(a) ). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955 ). “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. (citation omitted). “[T]he tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions. Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citation omitted). “When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an...