United States of America v. $12,000.00 in United States Currency

Filing 31

MEMORANDUM AND ORDER sustaining 29 Motion for Default Judgment; overruling 30 Objection; All right, title or interest in or to the Currency held by any person or entity is hereby forever barred and foreclosed. The Currency is forfeited to the United States of America. The Currency shall be disposed of by the U.S. Marshal's Service in accordance with law. Ordered by Chief Judge Joseph F. Bataillon. (1 Certified copy to USM)(ADB, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEBRASKA
UNITED STATES OF AMERICA,
Plaintiff,
v.
$12,000.00 IN UNITED STATES
CURRENCY,
Defendant.

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8:10CV284

MEMORANDUM AND ORDER

This matter is before the court on the government’s motion for default judgment
against $12,000.00 in United States Currency (“Currency”). Filing No. 29. The government
brought this action against the Currency under 21 U.S.C. § 881, in accordance with 28
U.S.C. §§ 1345, 1355, and 1395, alleging the Currency was proceeds of illegal drug
transactions. Filing No. 1. Shortly after the government filed suit, Nathan Mannani and
Bryson Newsome (collectively “Claimants”) filed a claim to the Currency and denying the
Currency was proceeds of illegal drug transactions. Filing No. 10. On September 8, 2011,
the magistrate judge entered an order setting the schedule for progression of this case in
which the magistrate judge authorized the parties to commence discovery. Filing No. 12.
As part of its discovery process, the government scheduled depositions of Claimants
on April 6, 2011. Filing No. 16. Claimants did not appear for their scheduled depositions
on April 6, 2011. The government brought a motion pursuant to Fed. R. Civ. P 37(a)(3)(C)
asking the court to “enter an [o]rder directing the Claimants . . . to present themselves for
deposition[s].” Filing No. 19. The magistrate judge granted the government’s motion and
ordered the Claimants to present themselves for depositions on or before June 13, 2011.
Filing No. 21. The government rescheduled depositions of Claimants, this time on June
2, 2011. Filing No. 22. The Claimants failed to present themselves for their rescheduled
depositions on June 2, 2011. Filing No. 24-1. The government then moved to strike the

Claimants’ previously filed Claim and Answer. Filing No. 23. The Claimants filed their
objection to the government’s motion to strike and asserted the government was not
hindered in its ability to proceed with the case despite Claimants’ failure to present
themselves for depositions. Filing No. 26.
The magistrate judge, after considering both the government’s and the Claimants’
contentions, overruled Claimants’ objection and granted the government’s motion to strike.
Filing No. 27. The clerk of court then issued an entry of default against the Claimants.
Filing No. 28. The government then moved for an order entering default judgment against
the Claimants. Filing No. 29. The Claimants object to the government’s motion for default
judgment on the same grounds as their previous objection and assert the government is
not hindered in its ability to proceed with the case despite Claimants’ failure to present
themselves for depositions. Filing No. 30.
Having considered the matter, the court finds the Claimants’ objection should be
overruled and a default judgment should be ordered in favor of the government. “When
a party against whom a judgment for affirmative relief is sought has failed to plead or
otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter
the party’s default.” Fed. R. Civ. P. 55(a). The court may enter “a default judgment against
the disobedient party” in instances where a party does not comply with the court’s
discovery orders. Fed. R. Civ. P. 37(b)(2)(A)(vi). Furthermore, “a default judgment against
a party who has appeared should not be entered unless the party has been put on notice
that failure to act in a certain manner may subject him to that sanction.” Marshall v.
Boyd, 658 F.2d 552, 554 (8th Cir. 1981) (citing Missouri v. Fid. & Cas. Co., 107 F.2d 343,
345-46 (8th Cir. 1939)). “Default judgment for failure to defend is appropriate when the
party’s conduct includes willful violations of court rules, contumacious conduct, or
intentional delays.” Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 856 (8th Cir.
1996) (citations omitted). Thus, a default judgment may be considered as a sanction only
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if there is: “1) a [prior] order compelling discovery; 2) a willful violation of that order; and
3) prejudice to the other party.” Everyday Learning Corp. v. Larson, 242 F.3d 815, 817 (8th
Cir. 2001) (citing Keefer v. Provident Life & Accident Ins. Co., 238 F.3d 937, 940 (8th Cir.
2000)).
In this case, the magistrate judge previously issued an order compelling discovery.
Filing No. 21. That order specifically informed Claimants of the possible consequences for
failure to comply. Id. Despite the magistrate judge’s warnings, the Claimants willfully
violated the magistrate judge’s order compelling discovery.

One Claimant, Nathan

Mannani, has deliberately chosen not to present himself for his deposition apparently for
fear of being arrested on an outstanding warrant for his “failure to pay fines and costs.”
Filing No. 24-1, argument of counsel for the government, page 5, lines 12-18. The other
Claimant, Bryson Newsome, has not returned calls made by his counsel regarding this
matter. Id., at 5-6, lines 22-6. The court notes “failure to respond to the magistrate judge’s
discovery order . . . [is] certainly grounds for default judgment. Ackra, 86 F.3d at 856
(citations omitted). Finally, the court finds the Claimants’ failure to present themselves for
depositions prejudices the government in presenting its case. Accordingly, this court
determines the Claimants’ objection should be overruled and find the order for a default
judgment in favor of the government is appropriate in this case.
Additionally, the court makes the following findings:
A. A Warrant for Arrest in Rem was issued by this court and was properly executed
on the Currency by the U.S. Marshal’s Service.
B. Publication of the notice of this action and of the arrest of the Currency was duly
made pursuant to order of this court dated August 6, 2010. Filing No. 5.
C. A declaration of publication was filed herein on October 13, 2010. Filing No. 13.
D. On August 17, 2010, the U.S. Marshal’s Service served copies of the Verified
Complaint, Notice of the Seizure and Procedure, and Warrant for Arrest in Rem on
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Claimants, as evidenced by the Process Receipt and Return. Filing No. 8. The return
indicates service was made by personal service upon their attorney, Donald L. Schense.
E. No other person or entity, other than Nathan Mannani and Bryson Newsome,
has filed a claim or answer to the government’s complaint within the time fixed by law.
F. The government’s motion for default judgment and decree of forfeiture should
be sustained.
THEREFORE, IT IS ORDERED:
1. The government’s motion for default judgment and decree of forfeiture, Filing No.
29, is hereby sustained.
2. Claimants’ objection to default judgment, Filing No. 30, is overruled.
3. All right, title or interest in or to the Currency held by any person or entity is
hereby forever barred and foreclosed.
4. The Currency is forfeited to the United States of America.
5. The Currency shall be disposed of by the U.S. Marshal’s Service in accordance
with law.
DATED this 3rd day of November, 2011.
BY THE COURT:

s/ Joseph F. Bataillon
Chief District Judge

*This opinion m ay contain hyperlinks to other docum ents or W eb sites. The U.S. District Court for
the District of Nebraska does not endorse, recom m end, approve, or guarantee any third parties or the services
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parties or their W eb sites. The court accepts no responsibility for the availability or functionality of any
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the opinion of the court.
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