Torres v. Horne

• Decision Date: 04 September 2012
• Docket Number: No. CV-06-2482-PHX-SMM,CV-06-2482-PHX-SMM
• Parties: Javier Torres, Lia Rivandeneyra, Plaintiffs, v. Thomas Horne, Attorney General of the State of Arizona, in his individual and official capacities, et al., Defendants.
• Court: U.S. District Court — District of Arizona

Javier Torres, Lia Rivandeneyra, Plaintiffs,

v.Thomas Horne, Attorney General of the State of Arizona,

in his individual and official capacities, et al., Defendants.

No. CV-06-2482-PHX-SMM

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Dated: September 4, 2012

MEMORANDUM OF DECISIONAND ORDER

Plaintiffs Javier Torres and Lia Rivadeneyra (collectively "Plaintiffs") are customers of Western Union Financial Services, Inc. ("Western Union") whose money transfers were subject to seizure warrants issued by the Maricopa County Superior Court. Plaintiffs allege that their money transfers were seized without probable cause, that due process notice of the seizures was not provided, and that these seizures violated the Commerce Clause. (Doc. 80 at 5.) Pending before the Court is Plaintiffs' Motion for Summary Judgment on the merits of their claims. (Doc. 229.) Also pending is former Attorney General Terry Goddard and Assistant Attorney General Cameron Holmes (collectively "Defendants") Cross-Motion for Summary Judgment contending that they are entitled to absolute and qualified immunity, as well as summary judgment on the merits of the claims. (Doc. 240.) Because absolute immunity is an issue to be resolved before the merits, see Imbler v. Pachtman, 424 U.S. 409, 419 n.13 (1976), the Court will first direct its attention to this issue. After careful consideration of the parties' arguments, the Court finds that Defendants are entitled toabsolute immunity and, therefore, will grant Defendants' Cross-Motion for Summary Judgment and deny Plaintiffs' Motion for Summary Judgment.

FACTUAL BACKGROUND

The general background of this case has been discussed in litigation occurring in both state and federal court. See W. Union v. Goddard, No. CV 06-2249-PHX-SMM (federal court); State of Arizona v. W. Union Fin. Servs., Inc., 216 Ariz. 361, 166 P.3d 916 (App. 2007); State v. W. Union Fin. Servs., Inc., 220 Ariz. 567, 208 P.3d 218 (2009) vacating 219 Ariz. 337, 199 P.3d 592 (App. 2008) (state court). In State of Arizona v. W. Union Fin. Servs., Inc., 216 Ariz. 361, 166 P.3d 916 (App. 2007), the Arizona Court of Appeals provided a background summary that is helpful to an understanding of the setting in which this case arose:

[Daniel Kelly, a financial crimes investigator with the Arizona Department of Public Safety] testifies that smugglers (referred to as "coyotes") of undocumented immigrants ("UDIs") are typically paid for their racketeering activity after they have successfully transported their human cargo into Arizona. The coyotes are paid by "sponsors" who typically reside in states, referred to as "corridor states," to which UDIs are frequently transported when they leave Arizona. In the early years of this decade, the coyote, upon successful transport of the UDI to Arizona, would contact the UDI's sponsor and request that the sponsor wire funds to the coyote in Arizona before the UDI was placed in transit to his destination from Arizona.

Despite the use of various strategies by the coyotes' pick-up agents to avoid detection when collecting wire-transfer payments, law-enforcement officers were able to identify and locate Western Union agents frequently used by traffickers due primarily to the high volume of business that began to occur with those agents. Once identified in this manner, further analysis permitted the identification of patterns associated with wire-transfer activity associated with racketeering and the identification of pick-up agents.

Kelly asserts that due to law enforcement's success at identifying and seizing wire-transfer transactions sent to Arizona, traffickers drastically reduced the number of wire-transfer payments into the state. Instead, illegal traffickers began directing that the payments for their activities be sent to pick-up agents in Sonora rather than Arizona. Kelly backs up these assertions by presenting his analysis of data voluntarily provided by Western Union that shows all of the wire-transfers to Sonora for the months of March and April 2005. Based on his analysis, Kelly determined that a disproportionate number of the financial transfers being sent to Sonora were sent to Western Union agents located in five cities along the Arizona border. These cities include Caborca, Altar, Nogales, Agua Prieta, and San Luis Rio Colorado. All of these cities are well known to law enforcement as staging areas for smugglers, particularly human smugglers.

Western Union, 216 Ariz. at 363-64, 166 P.3d at 918-19.

Regarding this case, the Court has previously set forth the basic facts. (See Docs. 183, 216.) In addition, the parties have also stipulated to certain facts. (Doc. 231-8 at 48-71.) Since at least October 2000, law enforcement personnel in Arizona have been assigned to a special Arizona Financial Crimes Task Force (the "Task Force"). (Doc. 231-8 at 49-50.) The Task Force has included Arizona Department of Public Safety personnel, employees of the Arizona Attorney General's Office and detectives from the City of Phoenix Police Department. (Id.) An objective of the Task Force was to identify and implement strategies to interrupt the flow of narcotics and alien smuggling proceeds flowing to and through Arizona. (Id.) The Task Force specialized in the investigation of money laundering through commercial money remitters, such as Western Union. (Doc. 250 at 2.)

The Task Force members engaged in a progressive investigation over several years that included, among other law enforcement actions, over 20 seizure warrants authorized by judges of the Maricopa County Superior Court. (Doc. 231-8 at 50.) Some of the seizure warrants authorized seizure for forfeiture of Western Union money transfers. (Id.) During the earliest stages of the Task Force's financial investigations in 2000, law enforcement personnel became aware of a flow of tens of millions of dollars per month in the form of Western Union money transfers paid out in cash at small Phoenix area Western Union agent locations. (Id.) Follow up analysis and investigation confirmed the connection of monies being distributed through Western Union money transfer transactions with illegal activity. (Id.)

Investigation and Initiation of In Rem Proceedings

Relevant to the time period of this lawsuit, Defendant Goddard was Attorney General of Arizona starting in January 2003. During the time period from 2000 to 2007, Defendant Holmes was an Assistant Attorney General in the Arizona Attorney General's Office. Holmes supervised the Financial Remedies Section within the Criminal Division of the Attorney General's Office. Holmes' caseload consisted of civil forfeiture and civilracketeering lawsuits. (Doc. 250 at 4.) In connection with the seizure warrants at issue in this case and the subsequent forfeiture proceedings involving the electronic money transfers, Defendant Holmes acted as the "attorney for the state" within the meaning of A.R.S. § 13-4301(1) (2006). (Doc. 237 at 25.)

Based upon the investigation of the Task Force, Task Force agents continued to seek seizure warrants. In regard to each seizure warrant, the criteria that would be used to specify which money transfers would be seized was decided on by the Task Force agents. (Doc. 237 at 26.) Neither Defendant Holmes nor Defendant Goddard made the decision as to what criteria for seizure would be used in the seizure warrant. (Id.) Each application for a seizure warrant was based upon detailed warrant affidavits which described the evidence supporting probable cause for seizure for forfeiture of the targeted money transfer transactions. (Doc. 237 at 18.) Task Force agents were responsible to prepare comprehensive affidavits which were then submitted for review to Defendant Holmes. (Id.) Arizona Department of Public Safety Detectives Tod Kleinman and George Gregor prepared the affidavits in support of the Sweep 18 seizure warrant. (Doc. 109, Ex. 5 & 6.) Kleinman was the sole affiant on the Sweep 21 seizure warrant affidavit. (Id.)

As the attorney for the State in connection with the seizure warrant affidavits submitted by the Task Force agents, Defendant Holmes indicated that he always reviewed the seizure warrant affidavit in order to satisfy himself that the seizure warrant being applied for was supported by probable cause. (Doc. 237 at 25.) Holmes also indicated that he supervised the preparation of the application for seizure warrants and its attachments, i.e., the affidavits in support of the seizure warrant and the proposed seizure warrant itself. (Id.; Doc. 231-8 at 58-71.)

After Holmes' review, the application for seizure warrant and its attachments-the supporting warrant affidavits and the proposed seizure warrant-would be taken to court and filed, numbered with a court number, and presented to a judge by the law enforcement officers who were the affiants on the supporting warrant affidavits. (Doc. 237 at 26.)

After the superior court considered and in this case issued the seizure warrants, Holmes "accomplished formal service of the warrants [commanding seizure of Plaintiffs' funds] on Western Union." (Id.)

Issuance of Seizure Warrants

The two warrants at issue in this case were issued by the Maricopa County Superior Court and then served by" Defendants on Western Union on March 15, 2006 ("Sweep 18"), and September 21, 2006 ("Sweep 21"). (Doc. 80, Ex. E & F.) Both of these warrants shared certain characteristics, including requiring the seizure of (1) person-to-person transactions, (2) sent from areas outside Arizona, (3) for delivery in Arizona (or in one warrant, Sonora, Mexico), (4) in any amount at or exceeding a threshold level, (5) during the time period the warrant was in effect.

Regarding Sweeps 18 and 21, Defendant Holmes served Western Union with letters, Seizure Warrant no. SW2006-02054, and Seizure Warrant no. (SW2006-002213. (Doc. 2318 at 57-71.)

March 15, 2006 Warrant (SW2006-002054 - Sweep 18): This warrant seized all person-to-person money transfers of $500 or more placed with Western

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