United States v. $134,972.34 Seized from FNB Bank

• Decision Date: 30 March 2015
• Docket Number: Civil Action No. CV–15–S–6–NE.
• Citation: 94 F.Supp.3d 1224
• Parties: UNITED STATES of America, Plaintiff, v. $134,972.34 SEIZED FROM FNB BANK, ACCOUNT NUMBER– 5351, Defendant.
• Court: U.S. District Court — Northern District of Alabama

94 F.Supp.3d 1224

UNITED STATES of America, Plaintiff

v.$134,972.34 SEIZED FROM FNB BANK, ACCOUNT NUMBER– 5351, Defendant.

Civil Action No. CV–15–S–6–NE.

United States District Court, N.D. Alabama, Northeastern Division.

Signed March 30, 2015.

Amanda Schlager Wick, Joyce White Vance, U.S. Attorney's Office, Birmingham, AL, for Plaintiff.

MEMORANDUM OPINION AND ORDER

LYNWOOD SMITH, District Judge.

Plaintiff, the United States of America, asserts a civil action in rem for the forfeiture of $134,972.34 in United States currency (“the defendant currency”) seized on August 20, 2014, from FNB Bank, account number– 5351, pursuant to 31 U.S.C. § 5317(c)(2).¹ The United States alleges that the defendant currency was involved in, or traceable to, acts of illegally structuring currency transactions in violation of 31 U.S.C. § 5324.² The case presently is before the court on the motion to dismiss and for return of the defendant currency or, in the alternative, motion for a more definite statement, filed by CWE Enterprises, Inc., and Carlton Wayne Edwards (collectively, “the claimants”) pursuant to Federal Rule of Civil Procedure 12(b)(6) and Rule G(8)(b) of the Supplemental Rules for Admiralty or Maritime and Asset Forfeiture Claims.³ Upon consideration, the motion will be denied for the reasons set out below.

I. LEGAL STANDARDS

Civil asset forfeiture cases are governed by the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. See 18 U.S.C. § 983(a)(4)(A) (“In any case in which the Government files in the appropriate United States district court a complaint for forfeiture of property, any person claiming an interest in the seized property may file a claim asserting such person's interest in the property in the manner set forth in the Supplemental Rules for Certain Admiralty and Maritime Claims, ...”). The Supplemental Rules apply to, among other proceedings, “forfeiture actions in rem arising from a federal statute.” Fed.R.Civ.P. Supp. R. A(1)(B). Further, “[a] claimant who establishes standing to contest forfeiture may move to dismiss the action under [Federal Rule of Civil Procedure] 12(b).” Fed.R.Civ.P. Supp. R. G(8)(b)(i ) (bracketed alteration supplied).

Federal Rule of Civil Procedure 12(b) permits a party to move to dismiss a complaint for, among other reasons, “failure to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6).⁴ That rule must be read together with Rule 8(a), which requires that a pleading contain only a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). While that pleading standard does not require “detailed factual allegations,” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 550, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), it does demand “more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citations omitted).

A pleading that offers “labels and conclusions” or “a formulaic recitation of the elements of a cause of action will not do.” [Twombly, 550 U.S., at 555, 127 S.Ct. 1955 ]. Nor does a complaint suffice if it tenders “naked assertion [s]” devoid of “further factual enhancement.” Id., at 557, 127 S.Ct. 1955.

To survive a motion to dismiss founded upon Federal Rule of Civil Procedure 12(b)(6), [for failure to state a claim upon which relief can be granted], a complaint must contain sufficient factual matter, accepted as true, to “state a claim for relief that is plausible on its face.” Id., 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., at 556, 127 S.Ct. 1955. The plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Ibid. Where a complaint pleads facts that are “merely consistent with” a defendant's liability, it “stops short of the line between possibility and plausibility of ‘entitlement to relief.’ ” Id., at 557, 127 S.Ct. 1955 (brackets omitted).

Two working principles underlie our decision in Twombly. First, the 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., at 555, 127 S.Ct. 1955 (Although for the purposes of a motion to dismiss we must take all of the factual allegations in the complaint as true, we “are not bound to accept as true a legal conclusion couched as a factual allegation” (internal quotation marks omitted)). Rule 8 marks a notable and generous departure from the hyper-technical, code-pleading regime of a prior era, but it does not unlock the doors of discovery for a plaintiff armed with nothing more than conclusions. Second, only a complaint that states a plausible claim for relief survives a motion to dismiss. Id., at 556, 127 S.Ct. 1955. Determining whether a complaint states a plausible claim for relief will, as the Court of Appeals observed, be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense. [Iqbal v. Hasty ] 490 F.3d [143], at 157–158 [ (2d Cir.2007) ]. But where the well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged—but it has not “show[n]”—“that the pleader is entitled to relief.” Fed. Rule Civ. Proc. 8(a)(2).

In keeping with these principles a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the framework of a complaint, they must be supported by factual allegations. When there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.

Iqbal, 556 U.S. at 678–79, 129 S.Ct. 1937 (emphasis added).

Due to the nature of this case, however, the traditional pleading rules are modified by Rule G(2) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions, which set out specific pleading requirements for forfeiture actions in rem. Courts are instructed to evaluate the sufficiency of a complaint seeking a forfeiture of assets by determining, among other things, whether the complaint meets that requirement of Supplemental Rule G(2) specifying that the pleading should “state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Fed.R.Civ.P. Supp. R. G(2)(f).⁵ The government's burden of persuasion was modified by the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), Pub.L. No. 106–185, 114 Stat. 202 (codified primarily at 18 U.S.C. § 983 ), providing that “the burden of proof is on the Government to establish, by a preponderance of the evidence, that the property is subject to forfeiture.” 18 U.S.C. § 983(c)(1).

In light of the requirements of Supplemental Rule G and CAFRA, it is unclear to what extent, if any, the Twombly/Iqbal “plausible claim for relief” standard applies to civil forfeiture complaints commenced by the government. Judge Kyle of the District Court of Minnesota illuminated this issue in United States v. Real Property and Premises, 657 F.Supp.2d 1060 (D.Minn.2009), where he observed that:

In the context of civil forfeiture proceedings, ... it is unclear whether, or to what extent, Twombly applies. Although Supplemental Rule G(8)(b)(i) expressly references Federal Rule of Civil Procedure 12(b), which was discussed in Twombly [,] Supplemental Rule G(8)(b)(ii) states that “[t]he sufficiency of the complaint is governed by Rule G(2).” Supplemental Rule G(2), in turn, lists several items a forfeiture complaint must contain, including inter alia a description of the property to be forfeited, the location of the property, and “sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial.” Supplemental Rule G(2)(a)-(f). There are no similar requirements in Federal Rule of Civil Procedure 8, which sets forth the pleading standard for civil actions to which the Supplemental Rules do not apply. Hence, because the Supplemental Rules provide the standards against which a forfeiture complaint must be measured, it is questionable whether Twombly has any application here.

Real Property and Premises, 657 F.Supp.2d at 1065–66 (alterations in original, ellipses added).

The Supplemental Rules make clear that they “apply to ... forfeiture actions in rem, ” and that the “Federal Rules of Civil Procedure also apply to the foregoing proceedings except to the extent that they are inconsistent with these Supplemental Rules. ” Fed.R.Civ.P. Supp. R.A. (emphasis supplied). In Twombly and Iqbal, the issue before the Supreme Court was the standard to be applied in deciding a Rule 12(b)(6) motion to dismiss for failure to state a claim, where Rule 8 governed the sufficiency of a pleading. See Iqbal, 556 U.S. at 677–79, 129 S.Ct. 1937 ; Twombly, 550 U.S. at 555–58, 127 S.Ct. 1955 ; see also American Dental Association v. Cigna Corp., 605 F.3d 1283, 1290 (11th Cir.2010) (observing that “Iqbal explicitly held that the Twombly plausibility standard applies to all civil actions, not merely antitrust actions, because it is an interpretation of Rule 8 ”) (citing Iqbal, 556 U.S. at 684, 129 S.Ct. 1937 (emphasis supplied)).

Thus, because Supplemental Rule G(2) governs the pleading standard for civil asset forfeiture cases, rather than Federal Rule of Civil Procedure 8, the standard enunciated and clarified in Twombly and Iqbal does not govern the sufficiency of such complaints.⁶ Instead, the heightened...