Wag-Aero, Inc. v. US

• Decision Date: 26 November 1993
• Docket Number: No. 92-C-1239.,92-C-1239.
• Citation: 837 F. Supp. 1479
• Parties: WAG-AERO, INC., A Wisconsin Corporation, Plaintiff, v. UNITED STATES of America, Carol B. Hallett, Commissioner, United States Customs Service, Robert A. Becker, Special Agent, United States Customs Service, A. Mary Schiavo, Inspector General, United States Department of Transportation, Victor M. Gryniewicz, Special Agent, Office of the Inspector General, United States Department of Transportation, Thomas C. Richards, Administrator, Federal Aviation Administration, and Certain Unknown Federal Agents In Their Official Capacities, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

837 F. Supp. 1479

WAG-AERO, INC., A Wisconsin Corporation, Plaintiff, v. UNITED STATES of America, Carol B. Hallett, Commissioner, United States Customs Service, Robert A. Becker, Special Agent, United States Customs Service, A. Mary Schiavo, Inspector General, United States Department of Transportation, Victor M. Gryniewicz, Special Agent, Office of the Inspector General, United States Department of Transportation, Thomas C. Richards, Administrator, Federal Aviation Administration, and Certain Unknown Federal Agents In Their Official Capacities, Defendants.

No. 92-C-1239.

United States District Court, E.D. Wisconsin.

November 26, 1993.

COPYRIGHT MATERIAL OMITTED

Paul F. Linn, Joseph A. Gemignani, Douglas P. Dehler, Michael, Best & Friedrich, Milwaukee, WI, for plaintiff.

Leura J. Garrett, U.S. Dept. of Justice, Civil Div., Washington, DC, for U.S.

Alexander J. Millard, U.S. Dept. of Transp., John Knudsen, Federal Aviation Admin., Washington, DC, Jayne T. Romanchek, U.S. Customs Service, Chicago, IL, for Robert A. Becker, Victor M. Gryniewicz, Thomas C. Richards, A. Mary Schiavo, Carol B. Hallett.

DECISION AND ORDER

CURRAN, District Judge.

In June of 1992, United States customs agents acting pursuant to a warrant searched the premises of the Wag-Aero corporation where they seized inventory and business records. Shortly thereafter, the company filed this civil suit seeking a return of its business property. See Federal Rule of Criminal Procedure 41(e). Wag-Aero is suing the United States of America and five of its officers: Carol B. Hallett, Commissioner of the United States Customs Service; Robert A. Becker, special agent of the United States Customs Service; A. Mary Schiavo, Inspector General of the United States Department of Transportation; Victor A. Gryniewicz, special agent of the Office of the Inspector General; Thomas C. Richards, Administrator of the Federal Aviation Agency, and "certain unknown federal agents in their official capacities."¹

In addition to the return of its property, the Plaintiff also claims its civil rights were violated and seeks an injunction preventing the "unlawful" use of the business records seized; an order declaring that the Defendants have violated the Plaintiff's constitutional rights; an order enjoining the Defendants from using the materials seized at any hearing or trial; an order enjoining the Defendants from making false or misleading representations to Wag-Aero customers; an order requiring the Defendants to notify Wag-Aero customers in writing that they had no basis for sending the customers a circular stating that Wag-Aero parts are faulty or unsafe. The Plaintiff also seeks money damages from the individual Defendants in compensation for loss of the property and goodwill. In addition to these claims, Wag-Aero amended its Complaint to ask for injunctive relief for violations of the Paperwork Reduction Act, 44 U.S.C. §§ 3501-3520. The Plaintiff says that this court has federal question jurisdiction over these claims, 28 U.S.C. § 1331, and can also exercise "the general equitable jurisdiction of the federal courts." See Plaintiff's First Amended Complaint at ¶ 18.

The Defendants have not answered, but have moved to dismiss all the claims against them pursuant to Federal Rule of Civil Procedure 12(b) on the grounds that this court does not have personal jurisdiction over three of the individual Defendants who have no contacts with Wisconsin; that the Plaintiff has not stated a claim for any violation of its constitutional rights upon which relief can be granted; that the individual Defendants are entitled to qualified immunity; and that the Plaintiff is not entitled to the injunctive or declaratory relief sought. This motion is now fully briefed and ready for decision.

I. ALLEGATIONS OF THE COMPLAINT

Wag-Aero is a corporation which has its principal place of business in the Township of Lyons, Wisconsin. On June 10, 1992, agents of the United States Customs Service and Department of Transportation Office of the Inspector General entered the premises and served a search warrant that had been issued on June 4, 1992, by United States Magistrate Judge Robert Bittner. The application and affidavit for the search warrant was prepared and filed by Defendant Robert A. Becker of the United States Customs Service. The Plaintiff says that the other four individual Defendants supervised and directed the application, along with other unknown agents in their "official capacities."

Wag-Aero alleges that Becker's application and affidavit "contained numerous false and misleading statements made with deliberate or reckless disregard of the truth and of the constitutional rights of Wag-Aero." Plaintiffs First Amended Complaint at ¶ 13. Thus, the Plaintiff concludes that the search warrant was issued without probable cause. Nevertheless, under the direction of Defendants Becker and Gryniewicz agents searched the property and confiscated business records and approximately $381,000.00 worth of inventory. Wag-Aero claims that the agents exceeded the scope of the warrant and conducted a general search.

The Plaintiff says that "It appears that the inventory was seized on the pretext that it was imported in purported violation of certain federal customs regulations purportedly requiring an importer to certify that all imported aircraft parts have been approved by the Federal Aviation Administration (FAA) to avoid the imposition of certain import duties and tariffs."²Id. at ¶ 16. After the search and seizure, Wag-Aero requested rulings from the Customs Service with respect to whether duty was owed on the seized property. See 19 C.F.R. § 177. According to Wag-Aero, some of the "binding rulings" which it has received so far establish that four of the items seized are appropriately categorized as duty free under the Harmonized Tariff Schedule of the United States even though they were not FAA approved. Wag-Aero believes that this belies Defendant Becker's allegation that "with these commodities, there is no other discernable reason to claim duty-free status except to assert the parts were FAA approved." Plaintiff's First Amended Complaint at ¶ 21. The Plaintiff goes on to assert that: "Given Mr. Becker's position as a Customs Special Agent, as well as the positions of the other Defendants as government officers presumably familiar with federal customs regulations, this assertion was either deliberately false or was made with a reckless disregard of the truth." Id.

With respect to other items for which Wag-Aero has obtained "binding rulings," the Plaintiff claims that it paid the appropriate duty or overpaid the amount due. Therefore, Wag-Aero believes that Defendant Becker's conclusion that "such items constitute evidence of a crime and should be seized was either deliberately false or was made with reckless disregard of the truth." Id. at ¶ 22.

Wag-Aero concedes that it has not received "binding rulings" as to all the items seized. It also admits that the Customs Service determined that it had not paid the duty owed for certain "radios" which were seized. However, the company says that it disputes the Customs Service's ruling on the radios based upon advice it has received from a licensed import broker. According to Wag-Aero, the Customs Service has not attempted to collect any additional duty due and no criminal proceedings have been instituted in the months following the search and seizure.

II. LEGAL STANDARDS GOVERNING MOTION TO DISMISS

A motion to dismiss under Federal Rule of Civil Procedure 12(b) can be granted if it appears from the allegations of the complaint and the attached exhibits that the Plaintiff can prove no set of facts which would entitle it to relief. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974); Beam v. IPCO Corporation, 838 F.2d 242, 244 (7th Cir. 1988). A plaintiff may not avoid dismissal, however, simply by attaching bare legal conclusions to narrated facts which fail to outline the basis of its claims. See Sutliff, Inc. v. Donovan Companies, Inc., 727 F.2d 648, 654 (7th Cir.1984) (complaint which merely recites statutory language and related legalese but fails to allege minimal material factual allegations outlining violations of the law insufficient). See also Gomez v. Illinois State Board of Education, 811 F.2d 1030, 1033 (7th Cir.1987) (court not bound by plaintiff's legal characterization of the facts); Strauss v. City of Chicago, 760 F.2d 765, 767-68 (7th Cir. 1985) (absence of any facts to support plaintiff's claim renders allegations mere legal conclusions subject to dismissal).

In this case the Plaintiff has attached the following exhibits to its Amended Complaint: Search Warrant (Exhibit A); Application and Affidavit for Search Warrant (Exhibit B); Search Warrant with evidence log attached (Exhibit C); and Federal Aviation Administration circular (Exhibit D). Because these written instruments are incorporated by reference into the Amended Complaint, they may be considered in connection with this motion. See Federal Rule of Civil Procedure 10(c). See also Venture Associates v. Zenith Data Systems, 987 F.2d 429, 431-32 (7th Cir.1993). The court must accept the pleader's allegations of fact as true together with such reasonable inferences as may be drawn in its favor. See Scheuer v. Rhodes, 416 U.S. at 236, 94 S.Ct. at 1686.

III. PERSONAL JURISDICTION

As a threshold matter, the Defendants argue that the claims for money damages raised against Defendants Carol B. Hallett, Commissioner of the United States Customs Service, A. Mary Schiavo, Inspector General of the United States Department of Transportation, and Thomas C. Richards, Administrator of the Federal Aviation Administration, in their individual capacities should be dismissed because this court lacks jurisdiction over their persons.³ See Federal Rule of Civil Procedure 12(b)(2). None of the three resides in the Eastern District of Wisconsin....