United States v. Sum of $70,990,605

• Decision Date: 25 November 2013
• Docket Number: Civil Action No. 12–1905 (RWR)
• Citation: 991 F.Supp.2d 154
• Parties: United States of America, Plaintiff, v. Sum of $70,990,605, et al., Defendants.
• Court: U.S. District Court — District of Columbia

991 F.Supp.2d 154

United States of America, Plaintiff,

v.Sum of $70,990,605, et al., Defendants.

Civil Action No. 12–1905 (RWR)

United States District Court, District of Columbia.

November 25, 2013

Elizabeth Ann Aloi, U.S. Department of Justice, Washington, DC, for Plaintiff.

MEMORANDUM OPINION AND ORDER

RICHARD W. ROBERTS, Chief Judge

Plaintiff United States filed this civil in rem forfeiture action, alleging that the defendant funds—approximately $61.3 million in three different banks—are the proceeds of a wire fraud and subject to seizure under 18 U.S.C. §§ 981, 983 and 984. Claimants Hikmat Shadman Logistics Services Co., Hikmat Shadman General Trading, LLC, Faizy Elham Brothers, Ltd., Everest Faizy Logistics Services, Hikmatullah Shadman, Najibullah, and Rohullah move under Federal Rule of Civil Procedure 65 for a preliminary injunction to release the funds held by the United States, to enjoin the government from harassing or threatening their witnesses and from transferring any assets of the claimants beyond the court's jurisdiction, to direct the United States to “gather, segregate, and preserve” evidence, and to direct the United States to identify any of the claimants' assets and any evidence about the claimants that have been transferred outside of the United States' control. Because the claimants' request to release the funds is moot, and because they have failed to show that they will suffer an irreparable injury or that other relevant factors favor relief, their motion for a preliminary injunction will be denied.

BACKGROUND

The United States filed this civil forfeiture action and seized the defendant funds as the proceeds of a fraud. The United States alleges that Hikmatullah Shadman, as a subcontractor and owner of Hikmat Shadman Logistics Services Company, “conspired to obtain payments from the United States for the transportation of military supplies in Afghanistan through the illegal and fraudulent use of the wires ... [by making] bribe payments, fraudulently inflat [ing] prices, and caus[ing] the United States to be invoiced for and to make payments of $77,920,605 to two bank accounts in Afghanistan.” 2d Am. Compl. at 6.

On August 27, 2013, Shadman, Najibullah, and Rohullah filed a verified claim and statement of interest in the seized property, asserting that they are the owners of the seized funds. Verified Claim and Statement of Interest or Right in Property Subject to Forfeiture In Rem at 8. They made these claims both individually, and on behalf of their companies. Id. at 14–16. It appears that all the accounts are held in the name of the companies, rather than the individuals, except for one account at Emirate National Bank. Id. at 8–12. The claimants then filed under 18 U.S.C. § 983(f) a motion for immediate release of funds, which has been denied.

The claimants now move under Federal Rule of Civil Procedure 65 for a preliminary injunction to suppress the warrants in rem and to release the claimants' property; to enjoin the government from “threatening or harassing” witnesses and transferring assets “beyond the jurisdiction of this Court;” and to direct the government to “gather, segregate, and preserve any and all evidence in any form in the possession of the United States or its agents” and “to identify any assets of Claimants or evidence related to Claimants that has been transferred outside United States control since the filing of Claimants' notice of appearance in this action.” Claimants' Mot. for Preliminary Injunctive Relief (“Claimants' Mot. for P.I.”) at 5. The United States opposes. U.S.'s Opp'n to the Claimants' Mot. for Preliminary Injunctive Relief (“U.S.Opp'n”).¹ A hearing on the motion for a preliminary injunction was held on November 14, 2013.²

DISCUSSION

“[I]njunctive relief is an ‘extraordinary and drastic remedy,’ and it is the movant's obligation to justify, ‘ by a clear showing,’ the court's use of such a measure.” Citizens United v. FEC, 530 F.Supp.2d 274, 278 (D.D.C.2008) (citing Mazurek v. Armstrong, 520 U.S. 968, 972, 117 S.Ct. 1865, 138 L.Ed.2d 162 (1997)); see alsoDorfmann v. Boozer, 414 F.2d 1168, 1174 (D.C.Cir.1969) (holding that a preliminary injunction is available only when “normal legal avenues are inadequate”). The movant “carries the burden of persuasion by a clear showing 1) of a substantial likelihood of success on the merits, 2) of irreparable injury if the injunction is not issued, 3) that the injunction would not substantially injure other interested parties, and 4) that the injunction is in the public interest.” Spadone v. McHugh, 842 F.Supp.2d 295, 300 (D.D.C.2012) (citing Cobell v. Norton, 391 F.3d 251, 258 (D.C.Cir.2004)). “The four factors should be balanced on a sliding scale, and a party can compensate for a lesser showing on one factor by making a very strong showing on another factor.” In re Navy Chaplaincy, 516 F.Supp.2d 119, 122 (D.D.C.2007) (citing CSX Transp., Inc. v. Williams, 406 F.3d 667 (D.C.Cir.2005)); seeDavis v. Pension Ben. Guar. Corp., 571 F.3d 1288, 1291–92 (D.C.Cir.2009).³The claimants here seek more than a prohibitive injunction that would maintain the status quo; they seek a mandatory injunction that would alter the status quo. “In this Circuit, ‘the power to issue a preliminary injunction, especially a mandatory one, should be sparingly exercised.’ ” Mylan Pharms., Inc. v. Shalala, 81 F.Supp.2d 30, 36 (D.D.C.2000) (quoting Dorfmann, 414 F.2d at 1173).⁴

I. IRREPARABLE INJURY

A showing of an irreparable injury traditionally “is a threshold requirement for a preliminary injunction,” City of Moundridge v. Exxon Mobil Corp., 429 F.Supp.2d 117, 127 (D.D.C.2006), and parties must meet “a high standard for irreparable injury,” Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C.Cir.2006). “[T]he injury must be both certain and great; it must be actual and not theoretical. The moving party must show [t]he injury complained of is of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm.” Id. (citations and internal quotation marks omitted) (citing Wis. Gas Co. v. FERC, 758 F.2d 669, 674 (D.C.Cir.1985) (per curiam)). “The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation weighs heavily against a claim of irreparable harm.” Wis. Gas Co., 758 F.2d at 674 (quoting Va. Petroleum Jobbers Ass'n v. Federal Power Comm'n, 259 F.2d 921, 925 (D.C.Cir.1958)).

“Implicit in each of these principles is the further requirement that the movant substantiate the claim that irreparable injury is ‘likely’ to occur. Bare allegations of what is likely to occur are of no value since the court must decide whether the harm will in fact occur.” Id. at 674 (citations omitted). Rather,

[t]he movant must provide proof that the harm has occurred in the past and is likely to occur again, or proof indicating that the harm is certain to occur in the near future. Further, the movant must show that the alleged harm will directly result from the action which the movant seeks to enjoin.

Id.

The claimants argue that “the failure to grant this motion will result in the destruction of Claimants' legitimate business.” Claimants' Mot. for P.I. at 11. The destruction of a business can potentially establish an irreparable injury. SeeWis. Gas Co., 758 F.2d at 674 (“Recoverable monetary loss may constitute irreparable harm only where the loss threatens the very existence of the movant's business.”). However, the claimants have not demonstrated how the requested injunctive relief is necessary to prevent the destruction of their business. While releasing the defendant funds may affect the functioning of their business, the claimants have already failed to demonstrate that they are entitled to this relief. Their remaining request for an injunction against the government to protect potential witnesses and evidence is devoid of factual support for how it will prevent the destruction of the claimants' business. SeeWis. Gas Co., 758 F.2d at 674 (requiring that the movant “substantiate” the claim with more than “[b]are allegations”). They request that “any interrogation relating to the facts alleged in this case by the government be conducted under Court supervision with counsel for both parties present,” and seek “[a] government-wide Order requiring the U.S. Government to gather and preserve any evidence and assets of Claimants in its possession.” Claimants' Mot. for P.I. at 11. They also request a “[p]rotective Order regarding the taking and preservation of testimony and evidence that may impact National Security or contain classified information.” Id. at 12. These measures would relate to taking and preserving evidence while the claimants contest the forfeiture action. But, the claimants make no showing of how the measures would save or influence the claimants' ability to continue business operations, or how the measures are in any way even related to their business operations. Accordingly, the claimants have failed to show that their irreparable injury is the destruction of their business.

The claimants argue that “[t]he bases for these requests have all been filed with the Court” and they “incorporate[ ] by reference” facts in their previous motions. Claimants' Mot. for P.I. at 5–6, 11. In a previous motion, the claimants contend that the government “has threatened U.S. Special Forces witnesses who want to testify in this case” and that the government “has hid [den] vital evidence from this Court substantially contradicting the allegations made here, possibly despoiled and not preserved such vital evidence.” Claimants' Request for Status Conference, and Mot. for Protective and Preservation Orders (“Claimants Mot. for Protective and Preservation Orders”) at 5.

Threatening witnesses may implicate irreparable injury. SeeArrendondo v. Delano Farms Co., No. CV F 09–1247, 2010 WL 3212000, at *2 (E.D.Cal. Aug. 10,...