Diamond Casino Cruise, LLC et al v. Department of Homeland Security et al

Filing 27

ORDER granting 13 Motion to Dismiss. Signed by Judge B. Avant Edenfield on 1/14/2013. (loh)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF GEORGIA
SAVANNAH DIVISION
DIAMOND CASINO CRUISE, LLC,
Plaintiff,
V

.

4: 12-cv-98

DEPARTMENT OF HOMELAND
SECURITY, HOMELAND SECURITY
INVESTIGATIONS and U.S. CUSTOMS
AND BORDER PROTECTION,
Defendants.
ORDER
I. INTRODUCTION
The Court once again takes up
Defendants' Motion to Dismiss Amended
Complaint. ECF No. 13. Survival of this
case depends on whether 18 U.S.C. §
983(a)(3) implicitly provides a private right of
action for claimants, like Diamond Casino
Cruise ("Diamond"), to seek the return of
seized property. Because it does not, the
Court GRANTS Defendants' motion to
dismiss.
II. BACKGROUND'
Diamond filed this suit seeking the return
of money seized from it as part of an
investigation into its business activities. See
ECF No. 1. Diamond's only claim is that the
complaint in United States v. $986,047.86,

For the facts underlying this dispute, please see the
Court's Order of November 26, 2012. ECF No. 20 at
1-2. The Court here only relates the facts relevant to
the private right of action issue.

No. 4:12-cv-84 (S.D. Ga. Mar. 28, 2012)2_
the civil forfeiture case involving the same
money sought in this proceeding—violates
the General Rules for Forfeiture Proceedings
found at 18 U.S.C. § 983. See ECF No. 8 at
1, 4. Specifically, Diamond argues the civil
forfeiture complaint fails to comply with the
Supplemental Rules for Certain Admiralty
and Maritime Claims ("Rules") and thus §
Diamond urges that
Id.
983(a)(3)(A).
therefore Defendants must return the money
pending completion of forfeiture proceedings.
Id.; see also 18 U.S.C. § 983(a)(3)(B).
Defendants responded by filing a motion
to dismiss for failure to state a claim. ECF
No. 13. The Court considered that motion
and Diamond's response, but elected to
request additional briefing on whether
Diamond could bring a claim directly under §
983(a)(3). See ECF No. 20. The parties each
filed briefs 3 and the Court is now prepared to
rule.
III. DISCUSSION
The Court first sets forth the proper legal
framework for evaluating whether a statute
provides an implied private right of action.
2

This action has been stayed pending the outcome of
criminal proceedings against Diamond and its
controlling members. See $986,047.86, at ECF No. 21.
Defendants timely filed their brief on December 17,
2012. See ECF No. 22. Diamond, on the other hand,
filed late. See ECF No. 25 (showing a filing date of
January 7, 2013 for Diamond's brief, three days after
the January 4 deadline the Court set in response to
Diamond's motion for extension of time). Diamond
never requested the Court's permission to file an outof-time brief. Nor has Diamond shown good cause for
its delay in filing. Such tardiness in filing is
unacceptable and excuses like "technical difficulties"
fly about as far as "the dog ate my homework." The
Court nevertheless considers Diamond's brief for two
reasons: 1) the present issue is one of first impression;
and 2) no prejudice to Defendants or the Court resulted
from Diamond's not-so-punctual filing.

minimum, that which "explicitly confer[s] a
right directly on a class of persons that
include[s] the plaintiff." Love, 310 F.3d at
1352 (quoting Cannon, 441 U.S. at 690 n.13).
"Statutes that focus on the person regulated
rather than the individuals protected,"
however, "create no implication of an intent
to confer rights on a particular class of
persons." Id. at 1353 (quoting Sandoval, 532
U.S. at 289 (internal quotations omitted)).

The Court then outlines the relevant portions
of § 983 and applies the framework to that
statute.
A. Private Rights of Action

"[W]hether a statute creates by
implication a private right of action is a
Love
question of statutory construction.
v. Delta Air Lines, 310 F.3d 1347, 1351 (11th
Cir. 2002) (quoting Cannon v. Univ. of Clii.,
441 U.S. 677, 688 (1979)) (internal quotations
omitted). Indeed, "[1]ike substantive federal
law itself, private rights of action to enforce
federal law must be created by Congress."
Alexander v. Sandoval, 532 U.S. 275, 286
(2001) (citing Touche Ross & Co. v.
Redington, 442 U.S. 560, 578 (1979)
(remedies available are those "that Congress
enacted into law")).
..

."

Courts must also examine "the statutory
structure within which the provision in
question is embedded." Id. "If that statutory
structure provides a discernible enforcement
mechanism," courts "ought not imply a
private right of action because '[t]he express
provision of one method of enforcing a
substantive rule suggests that Congress
intended to preclude others." Id. (quoting
Sandoval, 532 U.S. at 290).

"The judicial task is to interpret the statute
Congress has passed to determine whether it
displays an intent to create not just a private
right but also a private remedy." Id.
(emphasis added). That inquiry "begins with
the text and structure of the statute . . . and
ends once it has become clear that Congress
did not provide a cause of action." Id. at 288
n.7.

Finally, "if—and only if—statutory text
and structure" are inconclusive, courts look to
legislative history and the legal context in
which a statute was passed. Id. Such context,
however, "matters only to the extent it
clarifies text." Sandoval, 532 U.S. at 288.
And the legislative history of statutes that do
"not expressly create or deny a private
remedy will typically be equally silent or
ambiguous on the question" of whether the
statute provides a private right of action.
Love, 310 F.3d at 1353 (quoting Cannon, 441
U.S. at 694). Ultimately, courts "examine
legislative history with a skeptical eye." Id.

First, courts must "look to the statutory
text for rights-creating language." Love, 310
F.3d at 1352 (citation and internal quotations
omitted); see also Gonzaga Univ. v. Doe, 536
U.S. 273, 284 n.3 (2002) ("Where a statute
does not include. . . explicit 'right- or dutycreating language,' we rarely impute to
Congress an intent to create a private right of
action."); Cannon, 441 U.S. at 690 n.13
("[T]he right- or duty-creating language of [a]
statute has generally been the most accurate
indicator of the propriety of implication of a
cause of action."). Such language is, at a

B. 18 U.S.C. § 983 - General Rules For
Civil Forfeiture Proceedings

Section 983 provides a comprehensive
framework for civil forfeiture proceedings.
Several provisions expressly grant parties
access to courts at various stages of the
2

forfeiture process, for various reasons, with
various forms of relief available. See infra.
Section 983(a)(3) does not. Nor can this
Court imply such access when the statute is
measured "against the template laid out in
Sandoval." Love, 310 F.3d at 1354.
Section 983(a)(1) governs the notice the
government must give to interested parties
when it alleges property is subject to
forfeiture. Persons entitled to such notice
who do not receive it may move a court to
"set aside a declaration of forfeiture with
respect to that person's interest in the
property." 18 U.S.C. § 983(e)(1).
Section 983(a)(2) governs the substantive
content of, and procedure for filing, claims for
seized property. Such claimants are entitled
to the immediate release of seized property
under certain conditions. See id. at (f)(1)(A)(E). And claimants who believe they meet
those conditions may file petitions in district
court to have the property released if the
appropriate official does not release the
property within fifteen days of the claimant's
request. Id. at (f)(2)-(3)(A).
Section 983(a)(3) operates quite a bit
differently. It speaks not to interested
persons, but to the government about what is
required of it in response to claims. Once a
"person claiming property seized in a
nonjudicial civil forfeiture proceeding," id. at
(a)(2)(A), files a claim, and "[n]ot later than
90 days after [that] claim has been filed, the
Government shall file a complaint for
forfeiture [in the appropriate district court] in
the manner set forth in the . . . Rules . . . or
return the property pending the filing of a
complaint."
Id at (a)(3)(A). "If the
Government does not.. . file a complaint for
forfeiture or return the property, in

accordance with subparagraph (A) . . . the
Government shall promptly release the
property pursuant to regulations promulgated
by the Attorney General." Id. at (a)(3)(B). 4
If the government does file a civil
forfeiture complaint, however, "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 . . . Rules." Id at (a)(4)(A). A person
filing a claim in response to a civil forfeiture
complaint must file an answer no later than
twenty days after filing the claim. Id. at
(a)(4)(B). Claimants under § (a)(4) also are
entitled to "petition the court to determine
whether the forfeiture was constitutionally
excessive." Id at (g)(1).
1. Rights Creating Language (or the
Lack Thereof) in § 983 (a) (3)
Diamond argues that § 983(a)(3)'s
language in fact focuses on the "class for
whose especial benefit the statute was
enacted." ECF No. 25 at 4; Love, 310 F.3d at
1352. But Diamond's argument speaks not to
the language of (a)(3); rather, it relies on
"reading the statute as a whole." ECF No. 25
at 4. This approach stands in juxtaposition to
the statutory construction used in Sandoval,
Gonzaga, and Love and the Court cannot
abide it. Instead, the Court looks to (a)(3)'s
language alone in determining whether that
section contains rights creating language.

28 C.F.R. § 8.13 regulates the return of property
under § 983(a)(3)(B). Diamond's argument that the
"Attorney General has not created a procedure for the
return of the property" appears to overlook this
regulation. ECF No. 25 at 6, 9. In any case, like its
statutory counterpart, § 8.13 speaks only to the
government and offers no language indicating it creates
an enforceable right for private parties.

E

Section 983(a)(3) therefore
983(a)(3).
contains no implication "of an intent to confer
rights on a particular class of persons." Love,
310 F.3d 1353 (citing Sandoval, 532 U.S. at
289). Even so, the Court must still examine
the statutory structure of § 983 to determine if
that evidences congressional intent to provide
a private right of action. Id.

The Court readily determines (a)(3) does
not contain rights creating language. Section
983(a)(3) focuses exclusively on the person
regulated—the government. The government
is required to file a civil forfeiture complaint
or return the property within ninety days of a
party filing a claim in a non-judicial forfeiture
action. Id. at (a)(3)(A). The government's
complaint must adhere to the Rules. Id The
government must promptly release seized
property if it fails to timely file a complaint.
Id. at (a)(3)(B). And it is the government—
not an interested person—who is prohibited
from taking "any further action to effect the
civil forfeiture of such property" if it fails to
release the property or file a complaint within
Such language neither
ninety days. Id
"explicitly confer[s] a right directly on a class
of persons," nor does it identify "the class for
whose especial benefit the statute was
enacted." Love, 310 F.3d at 1352.

2. The Statutory Structure of§ 983
In addition to defining the burden of proof
in forfeiture proceedings, delimiting the
notice requirements, and providing for
indigent representation, § 983 also contains
mechanisms for persons interested in seized
property to assert various rights in court. 5
Section 983(e)( 1) provides any person entitled
to notice in a non-judicial forfeiture
proceeding who does not receive notice the
ability to move a court to set aside the
declaration of forfeiture. And claimants
under § 983(a) may petition a district court
for release of property if they first demand
release from the appropriate official and no
release is forthcoming within fifteen days of
demand. See 18 U.S.C. § 983(f)(1)-(3). Most
importantly, § 983(a)(4)(A) gives interested
parties the ability to file claims and answers,
in court, in response to a government civil
forfeiture complaint. Id at (a)(4)(A)-(b).

Diamond is correct that Congress enacted
§ 983 in order to protect the due process
rights of individuals whose property the
government seizes. See ECF No. 25 at 4;
H.R. REP. No. 106-192, Pt. 1, at 1 (1999).
"The question," however, "is not simply who
would benefit from [§ 983(a)(3)], but whether
Congress intended to confer federal rights
upon those beneficiaries."
California v.
Sierra Club, 451 U.S. 287, 294 (1981).

Although not a strict private right of
action, (a)(4) does allow claimants to assert
the precise argument—that a civil forfeiture
complaint fails to satisfy the Rules—
Diamond's complaint raises in this suit. That
argument turns into a defense asserted in an
answer, but the substance is the same. In

In Gonzaga, for example, the Supreme
Court declined to find an enforceable right in
the Family Educational Rights and Privacy
Act ("FERPA")—which prohibits federal
funding of educational institutions that release
records to unauthorized persons—because
FERPA spoke only to the person regulated,
not the people whose records the law
protected. 536 U.S. at 276; see 20 U.S.C. §
1232(g). As FERPA spoke, so too speaks §

Section 983 also defines and makes available an
innocent owner defense, see 18 U.S.C. § 983(d);
defines "civil forfeiture statute," id. at (i); and
prescribes when civil fines are appropriate for the filing
of frivolous claims. Id. at (h),

4

S

proper avenue to challenge the sufficiency of
the civil forfeiture complaint. 6

fact, Diamond utilized (a)(4) and filed a claim
and answer in the civil forfeiture proceeding
pending in this Court before Judge Moore.
See United States v. $986,047.86, No. 4:12cv-84, at ECF Nos. 14; 18 (S.D. Ga. Mar. 28,
2012). Diamond, moreover, raised the same
defense there it asserts as its claim here. Id. at
ECF No. 18.

Congress made specific choices when it
gave access to courts to those entitled to
notice who never got it, see 18 U.S.C. §
983(e)(1); to claimants whose property is not
released after they demand it, see id. at (0(3);
and to claimants in civil forfeiture actions.
See id. at (a)(4). Congress also chose not to
provide a free standing private right of action
to claimants when a civil forfeiture complaint
does not adhere to the Rules. See Id. at (a)(3).
And this Court simply cannot insert its own
view of who should be able to sue in place of
Congress's. See Sandoval, 532 U.S. at 286.

"The explicit provision of' one
enforcement mechanism "strongly
undermines the suggestion that Congress also
intended to create by implication a private
right of action in a federal district court but
declined to say so expressly." Love, 310 F.3d
at 1357 (citing Sandoval, 532 U.S. at 290).
And "[courts] ought not imply a private right
of action" when the statute at issue expressly
provides a different method to enforce a rule.
Id. at 1353.

Because (1) the text of § 983(a)(3) lacks
rights creating language; and (2) the statutory
structure affords Diamond another
enforcement mechanism to pursue its
arguments, the Court need not turn to § 983's
legislative history to determine no private

Section (a)(4) provides Diamond an
avenue to assert the very claim it asserts in
this case. And considerations of judicial
economy and simple common sense strongly
suggest that asserting the insufficiency of a
complaint as a defense in the same action as
the complaint itself makes more sense than
bringing an entirely new action to raise that
same defense as a new claim. Indeed, the
existence of (a)(4), coupled with the lack of
rights creating language in (a)(3), "precludes
a finding of congressional intent to create a
private right of action." Id. at 1358.

6

Diamond argues that (a)(4) does not provide an
alternative enforcement mechanism because
Defendants' civil forfeiture complaint does not include
specific mention of the cash amounts Diamond seeks
returned. See ECF No. 25 at 7. This is the same
argument Diamond makes to support its amended
complaint, and its response to Defendants' motion to
dismiss. See ECF Nos. 8 at 4-5; 14 at 6. Diamond
argues that no mention of the specific dollar amounts it
seeks returned creates a situation where, in effect, no
civil forfeiture complaint covering the money at issue
exists, and thus (a)(4) does not apply. See ECF No. 14
at 1. At bottom, however, that argument cuts at the
sufficiency of Defendants' complaint, despite
Diamond's protestations to the contrary. See id. ("This
case is not about whether the government's civil
forfeiture case adequately stated a claim . . .
Diamond itself expended substantial space arguing
why the complaint fails to satisfy the Rules. Id. at 9.
But even if the Court is incorrect in its characterization
of Diamond's argument, that does not change the fact
that Diamond's answer to Defendants' civil forfeiture
complaint is the proper forum—and the forum
provided by Congress in § 983(a)(4)—to pursue an
argument that the civil forfeiture complaint does not
apply to the amounts Diamond seeks returned.

Diamond may be correct that Defendants'
civil forfeiture complaint does not comply
with the Rules and thus (a)(3)(A). Diamond's
assertion of that argument in the civil
forfeiture action before Judge Moore may
ultimately prove fruitful. The problem is that
§ 983(a)(3)—even if Defendants' civil
forfeiture complaint violates (a)(3)—is not the
5

right of action exists here. See Love, 3 10 F.3d
at 1353 (stating that "if—and only if—
statutory text and structure" do not resolve the
private right of action issue do courts turn to
legislative history).
IV. CONCLUSION
18 U.S.C. § 983(a)(3) does not contain an
implied right of action. The Court therefore
GRANTS Defendants' motion to dismiss.
Diamond's complaint is DISMISSED.

This

'day of January 2013.

A(LELD,JUG
UNITED STATES DISTRIC COU T
SOUTHERN DISTRICT OF GEORGIA