United States of America v. $209,815 in United States Currency

Filing 103

ORDER denying 97 motion to strike and case management order. Further joint case management statement due by 6/19/2015 for case management and trial-setting conference at 10:00 AM on 6/26/2015 in Courtroom 1, 17th Floor, San Francisco. General discovery cutoff and last day for dispositive motions 7/10/2015. Last day to identify experts 7/24/2015, last day to identify rebuttal experts 8/14/2015, expert discovery cutoff 9/14/2015. Signed by Judge Samuel Conti on April 28, 2015. (sclc2, COURT STAFF) (Filed on 4/28/2015)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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United States District Court

For the Northern District of California

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UNITED STATES OF AMERICA
Plaintiff,

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v.

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$209,815 IN UNITED STATES
CURRENCY,

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Defendant.

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JULIO FIGUEROA,

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Claimant.

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) Case No. C 14-0780 SC
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) ORDER DENYING MOTION TO STRIKE
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I.

INTRODUCTION
Now before the Court is a fully-briefed1 motion by Plaintiff

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United States of America's ("the Government") to strike claimant

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Julio Figueroa's verified claim, ECF No. 11 ("Claim") and answer,

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ECF No. 14 ("Answer"), in this civil forfeiture action involving

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$209,815 in cash seized from Figueroa's luggage during a consensual

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encounter with Drug Enforcement Agency agents at San Francisco

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International Airport.

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1

ECF No. 97 ("Mot."); see also ECF No. 87

ECF Nos. 100 ("Opp'n"), 101 ("Reply")

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("SJ Order") at 2-6 (summarizing the facts of Figueroa's encounter

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with the DEA and denying his motion to suppress).

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argues the Court should strike Figueroa's claim and answer because

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he has repeatedly failed to provide sufficient responses to special

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interrogatories, a type of early discovery authorized by

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Supplemental Rule for Admiralty or Maritime Claims and Asset

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Forfeiture Actions ("Supplemental Rule") G(6).

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G(8)(c)(i)(A) (authorizing motions to strike for failure to comply

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with Supplemental Rule G(6)).

United States District Court

See also Supp. R.

The Court has ordered Figueroa to supplement his answers to

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For the Northern District of California

The Government

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the Government's special interrogatories on three occasions.

See

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SJ Order at 26-27, ECF Nos. 48 ("Mot. to Compel Order"), 96

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("1292(b) Order").

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supplementations by Figueroa), the Government continues to believe

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Figueroa's responses are insufficient and his claim and answer

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should be stricken.

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Government's motion to strike is procedurally deficient and that

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his responses are sufficient.

Despite these Court orders (and two additional

Figueroa disagrees, arguing that the

For the reasons set forth below the motion is DENIED.

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II.

BACKGROUND
After seizing the $209,815 at issue in this case from

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Figueroa's luggage, the Government filed a complaint alleging it is

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entitled to keep (or "forfeit" in civil forfeiture parlance) the

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currency as (the Government argues) it is proceeds derived from

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drug trafficking.

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981(a)(1)(B), (i) (providing for the forfeiture of "property . . .

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derived from, or traceable to . . . the manufacture, importation,

See ECF No. 1; see also 18 U.S.C. §

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sale, or distribution of a controlled substance . . . .").

The

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Government's theory is essentially that Figueroa was a drug

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courier, ferrying money or drugs between various places around the

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country in exchange for a small cut of the proceeds.

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Figueroa denies these allegations, contending that the

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$209,815 is his life savings, derived approximately half and half

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between a cash inheritance from his grandmother and his employment

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as a freelance consultant and graphic designer.

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("Figueroa Decl.") ¶¶ 2-4.

ECF No. 57-1

As a result, seeking to oppose the

United States District Court

For the Northern District of California

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forfeiture and have the $209,815 returned, Figueroa filed two

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pleadings: (1) a verified claim, which must identify the property

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claimed and the claimant, state the claimant's interest in the

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property, and be served on the government, and (2) an answer which

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must be filed within 21 days of filing the claim.

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G(5)(a)(i), (b).

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Supp. R.

The Government responded to Figueroa's claim by propounding

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ten special interrogatories under Supplemental Rule G(6), to which

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Figueroa timely (but incompletely) responded.

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Special interrogatories are intended to aid the Government in

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ferreting out unmeritorious or fraudulent claims.

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States v. $133,420, 672 F.3d 629, 635 (9th Cir. 2012) (quoting

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Advisory Committee Note to Subd. 6 of Supp. R. G).

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interrogatories the Government sent Figueroa probe, among other

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things, how and from whom Figueroa acquired the $209,815, the facts

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and records supporting his claim of lawful ownership of the money,

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and the identities and contact information of individuals with

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knowledge of Figueroa's interest in the money.

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Kenney Decl.") Ex. A ("Special Interrogs.").

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Supp. R. G(6)(b).

See United

The special

ECF No. 22 ("First

Figueroa's responses

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were riddled with boilerplate (largely frivolous) objections and

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stated "little more than . . . [Figueroa's] assertion of ownership

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and possession of the currency [asserted] in his verified claim,"

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and as a result the Government filed a motion to compel further

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responses to nine of the ten special interrogatories.

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Compel Order at 3; see also First Kenney Decl. Ex. B ("First

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Answers").

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Mot. to

The Court granted the motion, notably rejecting Figueroa's two
central contentions: (1) that the special interrogatories exceed

United States District Court

For the Northern District of California

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the scope permitted by Supplemental Rule G(6), and (2) because

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Figueroa's responses and verified claim were sufficient to show his

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standing, and the purpose of special interrogatories is to probe

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matters "bearing on a claimant's standing," Supplemental Rule G(6),

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it therefore follows that special interrogatories are no longer

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necessary as to Figueroa.

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Court found, both arguments are barred by the Ninth Circuit's

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decision in United States v. $133,420, 672 F.3d 629 (9th Cir.

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2012), which found substantially similar special interrogatories

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"well within the scope of the rule," id. at 643 n.5, and concluded

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Figueroa's second argument was contrary to "the text of Rule

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G(6)(a) itself," the advisory committee's notes, and the principles

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of statutory interpretation.

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Court granted the motion and ordered Figueroa to serve supplemental

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answers.

Mot. to Compel Order at 4-5.

Id. at 642-43.

As the

As a result, the

Mot. to Compel Order at 7.

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Shortly after Figueroa served his supplemental answers, the

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Government filed a motion to strike his claim, pointing out that

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while Figueroa's second set of answers provided some new responsive

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information, he still had not responded at all to five of the ten

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interrogatories and provided incomplete answers to four others.

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See ECF No. 60 ("Second Kinney Decl.") Ex. C ("Second Answers").

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Rather than respond, Figueroa moved to strike the Government's

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motion to strike for allegedly failing to comply with the Local

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Rules.

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submitted a notice and supplemental answers to special

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interrogatories.

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Figueroa's motion to strike the Government's motion to strike,

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ironically for itself failing to comply with the Local Rules, and

ECF No. 67.

While that motion was being briefed, Figueroa

ECF No. 68.

Subsequently, the Court denied

United States District Court

For the Northern District of California

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noting the Court's disapproval "of the increasing gamesmanship"

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between the parties.

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supplemented his responses to interrogatories during the briefing

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of the Government's motion to strike (and a parallel motion for

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summary judgment), the Court set a briefing schedule for both

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motions.

ECF No. 71, at 2.

Recognizing Figueroa had

Id. at 3-4.

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In a subsequent order denying the Government's motion to

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strike, the Court found that Figueroa's answers to three of the ten

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special interrogatories remained insufficient.

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Court found Figueroa's responses were insufficient as to

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interrogatories number 3 (which asks Figueroa to identify documents

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supporting his claim), 4 (which seeks a list of sources from which

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the currency was derived with dates, amounts, and the identity of

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individual sources), and 10 (which requests the identity of

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individuals Figueroa knows or believes to have information relevant

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to his claim and a summary of what information they might have).

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SJ Order at 24-25.

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responses "while inadequate in places, evince[d] candor and

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effort," and as a result, declined to strike his claim for these

Specifically, the

Nevertheless, the Court found that Figueroa's

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deficiencies, and instead ordered supplemental answers to the three

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deficient interrogatories.

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noted that "[i]f Figueroa's answers remain insufficient after

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supplementation, the Government may re-file its motion to strike."

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Id. at 26.

Id. at 25-26.

In so doing, the Court

Rather than supplement his answers for a fourth time, Figueroa

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filed a motion asking the Court to stay his obligation to

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supplement his answers and certify an appeal to the Ninth Circuit

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under 28 U.S.C. 1292(b), thus allowing Figueroa to take an

United States District Court

For the Northern District of California

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interlocutory appeal of the order compelling supplemental answers

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to special interrogatories.

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"substantial grounds for difference of opinion as to whether a

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civil forfeiture claimant must provide responses to further special

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interrogatories about a defendant property that was seized from him

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when the claimant has already established standing."

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at 1.

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Eighth Circuit case, United States v. $154,853, 744 F.3d 559 (8th

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Cir. 2014), that concluded if a claimant has standing to contest

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the forfeiture, "then special interrogatories [are] unnecessary to

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determine [the claimant's] standing as to that currency.

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district court abused its discretion in striking [the claimant's

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verified claim] . . . for failure to adequately respond to the

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special interrogatories when no special interrogatories were

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necessary to determine standing."

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that this approach was irreconcilable with the Ninth Circuit's

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analysis of the scope and role of special interrogatories and

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Supplemental Rule G in United States v. $133,420, 672 F.3d 629 (9th

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Cir. 2012), the Court refused to certify the issue for

Figueroa argued that there were

1292(b) Order

In support of this argument, Figueroa pointed to a recent

744 F.3d at 564.

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Thus the

Concluding

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interlocutory appeal, and reiterated its order that Figueroa serve

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supplemental answers to special interrogatories, this time by

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February 13, 2015.

1292(b) Order at 4.

On that date, Figueroa provided supplemental answers to just

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two of the three remaining interrogatories.

See ECF No. 98 ("Third

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Kenney Decl.") Ex. D ("Fourth Answers").

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deadline, Figueroa's counsel emailed counsel for the Government

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stating he "intend[ed] to amend those supplemental responses to

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include further information and response [sic] to special

Five days after the

United States District Court

For the Northern District of California

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interrogatory 4 by Friday or Monday at the latest."

Opp'n at Ex.

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1.

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responses until March 5, 2015, when he filed the responses at issue

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in this motion.

However, Figueroa's counsel apparently did not amend those

See Opp'n at Ex. 2 ("Fifth Answers").

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Now, after five attempts (three Court-ordered and two

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independent supplementations by Figueroa), the Government still

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believes Figueroa's responses are inadequate and seeks an order

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striking his claim and answer.

Figueroa opposes.

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III. LEGAL STANDARD
A motion to strike under the Supplemental Rules is "'something

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like a motion to dismiss where we can look to matters outside the

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pleadings, and where appropriate, allow for the possibility of

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conversion to summary judgment.'"

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730 F.3d 1051, 1055 (9th Cir. 2013) (quoting United States v.

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$6,976,934.65 Plus Interest, 478 F. Supp. 2d 30, 38 (D.D.C. 2007))

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(internal alterations omitted).

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United States v. $671,160.00,

The Supplemental Rules allow the Government to file a motion
to strike a verified claim or answer when a claimant fails to

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comply with Supplemental Rule G(6), which authorizes "special

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interrogatories."

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advisory committee's notes to Supplemental Rule G point out, "[n]ot

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every failure to respond to [special] interrogatories warrants an

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order striking the claim."

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Supp. R. G.

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have declined to strike forfeiture claims and answers despite

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insufficient or easily cured yet still defective responses to

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special interrogatories or where the claimant is litigating pro se.

Supp. R. G(8)(c)(i)(A).

Nonetheless, as the

Advisory Committee Note to Subd. 6 of

Relying on this language, courts (including this one)

United States District Court

For the Northern District of California

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See Order at 22-26; United States v. Approximately $658,830, No.

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2:11-cv-00967 MCE KJN PS, 2011 WL 5241311, at *3 (E.D. Cal. Oct.

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31, 2011); see also Stefan D. Casella, Asset Forfeiture Law in the

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United States, § 9.2(c) (2d ed. 2013).

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have granted motions to strike where claimants have failed to

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respond to special interrogatories after multiple extensions, see

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United States v. $34,900, No. 2:11-cv-490 DAK, 2012 WL 3202955, at

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*1 (D. Utah July 12, 2012), failure to respond in a timely manner

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or request an extension, see United States v. Approximately

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$67,900, No. 2:13-cv-01173 JAM-AC, 2013 WL 6440211, at *2 (E.D.

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Cal. Dec. 9, 2013), or failure to respond after seemingly

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abandoning the case.

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01845-SKO, 2013 WL 5314890, at *4-5 (E.D. Cal. Sept. 20, 2013).

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Nevertheless, other courts

See United States v. $10,000, No. 1:11-cv-

At the same time, the advisory committee's notes suggest that

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the "special role that [special interrogatories] play in the scheme

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for determining claim standing may justify a somewhat more

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demanding approach than the general approach to discovery sanctions

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under Rule 37."

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Thus, "[i]t stands to reason that if a party's noncompliance with

Advisory Committee Note to Subd. 6 of Supp. R. G.

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Rule G(6) would be considered sufficiently willful to warrant

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terminating sanctions under the more lenient Rule 37 standard, then

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terminating sanctions may be used to address a party's willful

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noncompliance with Rule G(6) as well."

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$333,806.93, No. CV 05-2556 DOC (ANx), 2010 WL 3733932, at *1 (C.D.

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Cal. Aug. 30, 2012).

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determine whether to impose terminating sanctions for discovery

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abuse under Rule 37: "(1) the public's interest in expeditious

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resolution of litigation; (2) the court's need to manage its

United States v.

The Ninth Circuit applies five factors to

United States District Court

For the Northern District of California

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docket; (3) the risk of prejudice to the defendants; (4) the public

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policy favoring disposition of cases on their merits; and (5) the

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availability of less drastic sanctions."

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(PPA) Prods. Liab. Litig., 460 F.3d 1217, 1226 (9th Cir. 2006)

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(quoting Malone v. U.S. Postal Serv., 833 F.2d 128, 130 (9th Cir.

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1987)).

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roadmap to allow a district judge "to think about what to do."

In re Phenylpropanolamine

These factors need not all be considered, but are simply a
Id.

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IV.

DISCUSSION
The Court finds that Figueroa has fully answered the

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Government's special interrogatories.

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of the three allegedly insufficient interrogatories in order.

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The Court will address each

The full text of the Government's third special interrogatory
reads:
If you have any records, documents, or tangible items
that reflect, refer or relate to your interest(s) in
defendant $209,815 or your claim to the defendant
currency,
please
identify
each
with
specificity.
Describe each and every document supporting your claim,
including (a) the identity of the author(s); (b) the
identity of the recipient(s); (c) the identity of those
copied; (b) the subject matter of the document; (d) the
number of pages of each document; and (e) the date of the
document. When used in connection with a natural person,

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the term "identity" means provide the name, last known
address and last known telephone number.
As an
alternative, you can opt to produce each and every
responsive document.

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Special Interrogs. at 1.

In its order on the Government's last

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motion to strike, the Court overruled Figueroa's objection that

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this interrogatory seeks production of documents (which the

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Supplemental Rules do not permit at this stage, see $133,420, 672

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F.3d at 643 n.5) because identifying records with specificity is

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obviously not the same as producing documents, and ordered Figueroa

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to supplement his response.

Now Figueroa has supplemented his

United States District Court

For the Northern District of California

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answers to state that he "do[es] not have any further documents to

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provide or specifically identify at this time," while still leaving

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open the possibility that he might be able to obtain invoices from

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freelance graphic design or consulting work he has performed.

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Fifth Answers at 2.

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"tantamount to an admission that [Figueroa] failed to conduct a

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proper and thorough search for responsive documents," the Court

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disagrees.

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does not have further documents to identify at this time, and, in

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any event, "a reasonable effort," not "extensive research" is all

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that is required to adequately respond to interrogatories.

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v. Sneath, 292 F.R.D. 629, 632 (E.D. Cal. 2013).

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extent Figueroa is in possession of responsive documents not listed

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or later comes into possession of such relevant materials, he has a

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duty to supplement his earlier responses.

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26(e)(1); see also Supp. R. G(1) ("To the extent that this rule

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does not address an issue, . . . the Federal Rules of Civil

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Procedure . . .

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///

While the Government complains argues this is

Reply at 2.

Figueroa's response makes clear that he

apply.").

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Gorrell

Moreover, to the

See Fed. R. Civ. P.

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Second, the Government's fourth special interrogatory asks

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Figueroa to list the sources and exact amounts of the currency he

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obtained from each source, including dates, and the names and

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contact information for individuals from whom the amounts were

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derived.

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previously, Figueroa's prior responses stated only that he earned

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portions of the $209,815 as a freelance graphic designer or

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consultant, but failed to identify any organizations he performed

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freelance work for, and how much "if known, he obtained from each

See Special Interrogs. at 1-2.

United States District Court

For the Northern District of California

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source."

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that he has not kept records of all work he has done, he has

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provided a list of five individuals or organizations for which he

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performed paid work along with their contact information and the

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ranges for various services he performed.

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This is sufficient.

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exacting records, the Court finds the burden of requiring more

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exacting answers outweighs the likely benefit at this stage of

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proceedings.

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reminds Figueroa that to the extent he discovers further

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information responsive to this interrogatory, he has a duty to

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supplement his response.

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Supp. R. G(1).

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SJ Order at 25.

As the Court found

While Figueroa's latest answers state

Fifth Answers at 3-4.

Given that Figueroa seems to have not kept

See Fed. R. Civ. P. 26(b)(2)(C).

Again, the Court

See Fed. R. Civ. P. 26(e)(1); see also

Finally, Figueroa's response to the Government's tenth special

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interrogatory, which sought the identity of individuals having

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information relating to his claim over the currency and a

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description of the information they have, is sufficient as well.

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Figueroa has identified his father as someone having information

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about both his inheritance and employment and two individuals from

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an organization with which he worked, Instituto Familiar de la

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Raza, who can both attest to his employment there.

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at 4.

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person has information pertaining to [his] interest in the

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Defendant property."

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insufficient because he has not provided "any information about

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those persons with knowledge of his claimed inheritance," Reply at

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6 (internal quotation marks omitted), Figueroa's response clearly

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states that his father has knowledge of his inheritance and

Fifth Answers

Aside from these, Figueroa does not "believe any other

While the Government argues this is

United States District Court

For the Northern District of California

10

provides his telephone number.

See Fifth Answers at 4.

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result, the Government's complaints about this special

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As a

interrogatory are misplaced.
Because Figueroa's responses to each of the three remaining

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special interrogatories are adequate, the Court need not reach the

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question of whether striking his claim is the appropriate sanction.

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Accordingly, the motion is DENIED.

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V.

CONCLUSION
For the reasons set forth above, the Court finds Figueroa's

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answers are sufficient and the motion to strike is DENIED.

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last, this case is ready to proceed to discovery.

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somewhat from the parties' joint case management statement, ECF No.

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94, the Court hereby ORDERS the following case management schedule:

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

At

As modified

June 26, 2015 - case management conference and pre-trial and

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trial setting at 10:00 AM in Courtroom 1, 17th Floor, San

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Francisco Courthouse.

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

July 10, 2015 - general discovery cutoff and last day to file
dispositive motions.

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1



July 24, 2015 - Last day to identify experts.

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

August 14, 2015 - last day to identify rebuttal experts.

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

September 14, 2015 - expert discovery cutoff.

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Nonetheless, before the parties embark on discovery, the Court

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has some words of warning.

The progress of this action to date

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should not be taken as a guide for how discovery should proceed.

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On the contrary, it should not have taken over a year, three court

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orders, and five supplementations for Figueroa to fully respond to

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a series of straightforward interrogatories probing topics the

United States District Court

For the Northern District of California

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Ninth Circuit deemed "well within the scope of the" Supplemental

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Rules.

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Figueroa's pattern of supplementing his responses shortly after the

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Government filed each motion to strike is troubling.

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supplementations raise the question of whether the parties are

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working together in good faith to resolve their disputes without

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the Court's intervention or simply trying to make life difficult

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for one another.

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only amplified by counsels' clear distaste for one another.

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Opp'n at 1 n.1 & Ex. 1; see also Mattel, Inc. v. MCA Records, Inc.,

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296 F.3d 894, 908 (9th Cir. 2002).

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heeded and intransigence continues to be the norm, the Court will

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impose sanctions on the offending party or parties.

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§ 1927.

See $133,420, 672 F.3d at 643 n.5.

Particularly,

These

The Court's doubts about the parties' efforts are

If these warnings are not

See 28 U.S.C.

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IT IS SO ORDERED.

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Dated: April 28, 2015

UNITED STATES DISTRICT JUDGE

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See