United States of America v. Funds in the amount of Two Thousand Dollars ($2,000) et al

Filing 54

MEMORANDUM Opinion and Order Signed by the Honorable Milton I. Shadur on 8/30/2012:Mailed notice(srn, )

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

)
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Plaintiff,
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v.
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FUNDS IN THE AMOUNT OF
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$574,840, et al.,
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Defendants.
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____________________________________)
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STEPHEN UNSWORTH and
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RACHEL PILLSBURY,
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Claimants.
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UNITED STATES OF AMERICA,

Case No. 11 C 7803

MEMORANDUM OPINION AND ORDER
This action, launched by the United States' Verified Complaint for Forfeiture of five
items of property -- funds in the amounts of $574,840, $63,184, $2,000, $856 and $21,100 -- has
been at an impasse for months, ever since claimants Stephen Unsworth ("Unsworth") and Rachel
Pillsbury ("Pillsbury") weighed in with their respective conclusory claims of possessory interest
or ownership interest or both. When the government then promptly responded with a motion
(Dkt. 14) to strike those claims (1) because of their asserted noncompliance with the
Supplemental Rules to the Federal Rules of Civil Procedure1 and (2) because of the claimants'
asserted failure to establish their requisite Article III standing, both claimants retorted with a joint

1

Rule G of those Supplemental Rules deals with in rem civil forfeiture actions and is
cited here simply as "Rule G --."

motion of their own and a supporting memorandum of law (together Dkt. 21), seeking a stay of
these proceedings pursuant to 18 U.S.C. § 981(g)(2) ("Section 981(g)(2)"), a motion triggered by
the claimants' concerns as to criminal prosecutions brought against them in the Circuit Court of
Cook County.
Since that time the parties have been embroiled in disputes that have effectively blocked
this action from going forward. Both sides have urged their respective positions vigorously, with
the intransigence of Unsworth's counsel (who has also served as lead counsel in actions taken
jointly by the two claimants) having been the principal roadblock standing in the way of this
Court's desire to resolve the Article III standing issue.
This Court has always been solicitous of the rights of litigants who are concerned lest
their disclosures in civil litigation may rise up to prejudice then in criminal proceedings, either
pending or impending. Thus, for example, it has slowed up the entire discovery process in 42
U.S.C. § 1983 lawsuits against certain police officers (those who have either been indicted or are
the subject of criminal investigation) by adopting the device of staying the depositions of those
officers. Such stays enable the officers to avoid their having to call upon the Fifth Amendment
privilege against self-incrimination, a step that would give rise to adverse inferences in the civil
action under the authority of Baxter v. Palmigiano, 425 U.S. 308 (1976).
Just so here. Attached to this memorandum opinion and order are this Court's oral
statement of February 24, 2012 dealing with the subject (Ex. 1) and the March 14, 2012
protective order (Ex. 2) that was then issued (Dkt. 30). Unfortunately defense counsel then
elected to frustrate the constructive purpose sought to be served by the entry of that order -counsel provided largely nonconstructive nonresponses to the Special Interrogatories that were
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propounded by the government under the mantle of insulation that the protective order sought to
provide for the claimants. Thus, as the government has pointed out, the lead defense counsel (a
California lawyer) advanced the same arguments in response to the government's Special
Interrogatory 6 that he had recently urged unsuccessfully before the Ninth Circuit in another civil
forfeiture action, United States v. $133,420 in United States Currency, 672 F.3d 629 (9th Cir.
2012) -- and he has provided much the same type of stonewalling in dealing with Special
Interrogatories 3, 4, 5, 8 and 9.
What has ensued has been a series of skirmishes marked by the government's motion to
compel answers to those Special Interrogatories (Dkt. 34), followed by claimants' response to
that motion, coupled with a renewed motion to stay this action pursuant to Section 981(g)(2)
(Dkt. 37), and most recently by the government's renewed motion to strike claimants' claims
(Dkt. 45) and then, late last month, by claimants' supplemental brief reasserting their legal
position (Dkt. 48), this time coupled with their joint motion to suppress or quash the
government's acquisition of the funds at issue here (Dkt. 49). All of this has stalemated the
litigation.
For months the claimants here have been in a position much akin to that of the contemnor
who, having been placed in custody to induce his compliance with a performable court order that
he has refused to honor, is metaphorically said to have the keys to his cell in his own pocket.
With existing caselaw far from clear as to whether a claimant in a civil forfeiture proceeding
under the circumstances of this case can establish the requisite Article III standing by his or her
ipse dixit, and with this Court having the threshold obligation to make that finding before going
on to the merits, it proposed to -- and did -- enter a protective order (as authorized by Section
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981(g)(3)) to protect claimants' other vital interests even while they provided, under seal, the
factual input that would enable this Court to rule on an informed basis.
As already discussed, that protective order was entered in March of this year. But
claimants' counsel have stubbornly refused to respond to the government's Special Interrogatories
(interrogatories authorized by Rule G(6)(a)), seeking to justify that refusal in material part by the
same arguments that the same California lawyer had advanced and that were found wanting by
the Ninth Circuit earlier this year. Patience has its limits -- resolution of the parties' impasse is
past due.
This Court regrets the turn that matters have taken, especially given its efforts to protect
the interest of the claimants while dealing with this forfeiture action. That level of regret extends
to the claimants' most recent merits-related filing (Dkt. 49), as to which this Court expresses no
substantive views because claimants' conduct has frustrated resolution of the Article III standing
issue that must precede merits-related considerations.

Conclusion
In sum, the government has been within its rights in posing its Special Interrogatories
under Rule G(6) and in seeking to strike the claimants' filings under Rule G(8)(c). At this point
this Court breaks the existing logjam (1) by granting the government's motions (Dkts. 14 and 45)
to strike the Unsworth and Pillsbury claims and (2) by denying the claimants' last-referred-to
motion (Dkt. 49), except the portion of that motion that seeks leave for its filing under seal,

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which is granted. Finally, a status hearing date is set for 8:45 a.m. September 12, 2012 to discuss
what further proceedings are appropriate.

__________________________________________
Milton I. Shadur
Senior United States District Judge
Date: August 30, 2012

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