U.S. v. Banco Internacional/Bital S.A.

• Decision Date: 17 April 2000
• Docket Number: No. CV 99-6291 ABC (CWX).,CV 99-6291 ABC (CWX).
• Citation: 110 F.Supp.2d 1272
• Parties: UNITED STATES of America, Plaintiff, v. BANCO INTERNACIONAL/BITAL S.A., Defendant.
• Court: U.S. District Court — Central District of California

110 F.Supp.2d 1272

UNITED STATES of America, Plaintiff, v. BANCO INTERNACIONAL/BITAL S.A., Defendant.

No. CV 99-6291 ABC (CWX).

United States District Court, C.D. California.

April 17, 2000.

COPYRIGHT MATERIAL OMITTED

Gregory Staples, United States Attorney Los Angeles, for Plaintiff.

Winthrop, Stimson, Putnam & Roberts, Philip Le B. Douglas, New York City, Akin, Gump, Strauss, Hauer & Feld, Stephen Mansfield, Los Angeles, CA, for Defendant.

ORDER GRANTING DEFENDANT'S MOTION PURSUANT TO FED. R. CIV. P. 56.

COLLINS, District Judge.

Defendant's Motion pursuant to Fed. R.Civ.P. 56 came on regularly for hearing before this Court on April 17, 2000. After reviewing the materials submitted by the parties, argument of counsel, and the case file, the Court GRANTS Defendant's Motion for Summary Judgment.

I. Background

A. Factual Background

The Government operated a money laundering "sting," Operation Casablanca, directed at Mexican banks from approximately October 1996 to April 1998. (Stmnt. of Genuine Issues ("Facts") ¶ 2.) For this operation, the Government utilized "money brokers," and confidential reliable informants who had pre-existing connections to drug traffickers and money launderers. As the Government describes it, the money laundering operated as follows:

[T]he Mexican bank would establish bank accounts in the names of straw owners at one of its branches. When the government wished to launder money, it would wire-transfer the money (in the form of U.S. dollars) into these straw accounts. [¶] This frequently involved wire-transferring the money to one of the Mexican bank's accounts at a U.S. Bank (referred to as a "correspondent account"), for further credit to the straw account. [¶] The Mexican bank would then issue cashier's checks, again in U.S. dollars, to whatever fictitious names the informant or undercover agent would specify .... The Mexican banker involved would receive a commission for his participation in the money laundering.

(Complt. ¶¶ 16-18.)

Defendant Banco Internacional/Bital is a Mexican bank that was targeted by Operation Casablanca. (Facts ¶¶ 1-5.) At least one Bital employee, Gildardo Martinez-Lopez, engaged in money laundering activities with undercover agents. (Facts ¶¶ 5-7.) Martinez became involved after an informant explained that the informant was a money launderer for the Cali cartel and needed more bank accounts "to spread the money around." (Complt.¶ 31.) Martinez agreed to assist the money launderers, which included signing the cashier's checks. Among other things, Martinez agreed to: deny knowledge of the money's origin, vouch for the existence of the fictitious companies, and act "stupid" if the Hacienda (the Mexican equivalent of the U.S. Treasury Dept.) inquired into his actions. (Facts ¶ 6.) Martinez also advised the informant to send checks in uneven amounts between $55,000 and $60,000, instead of the larger sized checks that the informant suggested. (Complt. ¶ 40; see also Facts ¶ 10.)

Martinez was unable to involve other Bital employees even though the Government requested that Martinez do so. (Facts ¶ 7.) The Government also sought to draft another employee, Luis Carlos Rivas, into Operation Casablanca. (Facts ¶¶ 11,12.) Rivas was a trainee at the time and, therefore, was unable to actually participate in any money laundering transactions. (Facts ¶¶ 13,15.) Nevertheless, through Operation Casablanca, the Government laundered over $3.9 million in purported narcotics proceeds through Bital. (Facts ¶ 14.)

B. Procedural Background

The first proceeding between these parties commenced on June 9, 1998, when the Government filed a Civil Forfeiture action against Bital's funds. (Facts ¶ 21.) The forfeiture action sought $3,148,884.40 which was seized from Bital's accounts in the United States. Bital filed a motion pursuant to Fed.R.Civ.P. 12(c) attacking the Civil Forfeiture action on June 25, 1999. On August 9, 1999, the Court limited the Government's forfeiture action "to the amount of bank commissions and bank charges that were not returned to the Government via the cashier's checks." United States v. $3,148,884.40, 76 F.Supp.2d 1063, 1064 (C.D.Cal.1999). On September 27, 1999, the parties stipulated to a dismissal with prejudice. (Facts ¶ 23.) The Government stipulated that Bital's fees and commissions were only $600. (Facts ¶ 16.) Accordingly, the Court ordered the action dismissed with prejudice on September 30, 1999. (Facts ¶ 23.)

On June 21, 1999, before the forfeiture action had terminated, the Government filed this Civil Penalty action against Bital pursuant to 18 U.S.C. § 1956(b). Bital filed the instant motion for summary judgment on January 3, 2000. Bital seeks summary judgment in its favor on the following grounds: (1) the claim preclusive effect of the prior judgment, (2) the lack of evidence that any employee knowingly engaged in money laundering to benefit Bital, and (3) the fact that the penalty sought by the government is unconstitutionally excessive. The Government opposes.¹

II. Discussion

A. Summary Judgment Standard

It is the burden of the party who moves for summary judgment to establish that there is "no genuine issue of material fact, and that the moving party is entitled to judgment as a matter of law." Fed. R.Civ.P. 56(c); British Airways Bd. v. Boeing Co., 585 F.2d 946, 951 (9th Cir. 1978), cert. denied, 440 U.S. 981, 99 S.Ct. 1790, 60 L.Ed.2d 241 (1979). If the moving party has the burden of proof at trial (the plaintiff on a claim for relief, or the defendant on an affirmative defense), the moving party must make a showing sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party. Calderone v. United States, 799 F.2d 254, 259 (6th Cir.1986) (quoting W. Schwarzer, Summary Judgment Under the Federal Rules: Defining Genuine Issues of Material Fact, 99 F.R.D. 465, 487-88 (1984)). This means that, if the moving party has the burden of proof at trial, that party must establish beyond peradventure all of the essential elements of the claim or defense to warrant judgment in that party's favor. Fontenot v. Upjohn Co., 780 F.2d 1190, 1194 (5th Cir. 1986).

If the opponent has the burden of proof at trial, then the moving party has no burden to negate the opponent's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). In other words, the moving party does not have the burden to produce any evidence showing the absence of a genuine issue of material fact. Id. at 325, 106 S.Ct. 2548. "Instead, ... the burden on the moving party may be discharged by `showing' — that is, pointing out to the district court — that there is an absence of evidence to support the nonmoving party's case." Id.

Once the moving party satisfies this initial burden, "an adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings ... [T]he adverse party's response ... must set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e) (emphasis added). A "genuine issue" of material fact exists only when the nonmoving party makes a sufficient showing to establish the essential elements to that party's case, and on which that party would bear the burden of proof at trial. Celotex, 477 U.S. at 322-23, 106 S.Ct. 2548. "The mere existence of a scintilla of evidence in support of the plaintiffs position will be insufficient; there must be evidence on which a reasonable jury could reasonably find for plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his or her favor. Id. at 248, 106 S.Ct. 2505; Griffeth v. Utah Power & Light Co., 226 F.2d 661, 669 (9th Cir.1955).

B. Claim Preclusion

The doctrine of claim preclusion, or res judicata, precludes litigation of a subsequent lawsuit where the prior adjudication "(1) involve[s] the same `claim' as the later suit, (2) ha[s] reached a final judgment on the merits, and (3) involve[s] the same parties or their privies." Nordhorn v. Ladish Co., 9 F.3d 1402, 1404 (9th Cir.1993). Moreover, because the "doctrine of [claim preclusion] is motivated primarily by the interest in avoiding repetitive litigation, conserving judicial resources, and preventing the moral force of court judgments from being undermined," the doctrine precludes both all claims that were previously litigated, as well as "all claims that could have been asserted in the prior action." International Union v. Karr, 994 F.2d 1426, 1430 (9th Cir.1993) (internal quotations and citations omitted).

1. Same Claim.

Courts consider a variety of factors in determining whether successive lawsuits involve a single claim, or cause of action, such as:

(1) whether rights or interests established in the prior judgment would be destroyed or impaired by prosecution of the second action; (2) whether substantially the same evidence is presented in the two actions; (3) whether the two suits involve infringement of the same right; and (4) whether the two suits arise out of the same transactional nucleus of facts.

Costantini v. Trans World Airlines, 681 F.2d 1199, 1201-1202 (9th Cir.1982). These factors, however, are considered "tools of analysis, not requirements." Karr, 994 F.2d at 1430 (quoting Derish v. San Mateo-Burlingame Bd. of Realtors, 724 F.2d 1347-1349 (9th Cir.1983)). The last of these criteria is considered to be the most important factor. Costantini, 681 F.2d at 1202. Therefore, courts can apply claim preclusion "on the grounds that two claims arose out of the same transaction, without reaching other factors cited in Costantini." Karr, 994 F.2d at 1430; United States v. Northrop Corporation, 147 F.3d 905, 910 (9th Cir.1998) (finding that the second suit was part of the same cause of action by considering whether or not the suits arise out of the same transactional facts).

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