Charles Allen, et al vs Gregory Damm, et al
Filing
363
ORDER Denying 321 Motion to Dismiss Plaintiff Robert Kahre and Defendant Jared Halper. Signed by Judge David A. Ezra on 11/28/12. (Copies have been distributed pursuant to the NEF - MMM)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA
CHARLES ALLEN, et al.,
)
)
Plaintiffs,
)
)
vs.
)
)
UNITED STATES OF AMERICA, )
et al.,
)
)
Defendants.
)
_____________________________ )
CV. NO. 03-01358-DAE-RJJ
ORDER DENYING FEDERAL DEFENDANTS’ MOTION TO DISMISS
PLAINTIFF ROBERT KAHRE AND DEFENDANT JARED HALPER
Pursuant to Nevada Local Rule 78-2, the Court finds this matter
suitable for disposition without a hearing. After reviewing the Motion to Dismiss
Plaintiff Robert Kahre and Defendant Jared Halper filed by the Federal Defendants
(“Defendants”), and the supporting and opposing memoranda, the Court DENIES
Defendants’ Motion (doc. # 321).
BACKGROUND
I.
Factual Allegations
Plaintiffs describe themselves as a group of individuals boycotting the
Federal Reserve System by using gold and silver coins manufactured by the United
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States Mint as a medium of exchange and “thereby avoiding income taxes imposed
due to the exchange rate between gold and silver dollars and Federal Reserve Notes
denominated as if they were dollars.” (“Pro Order,” Doc. # 56 at 2.) Plaintiffs have
filed suit against high ranking officials in the Department of Justice (“DOJ”) and
Internal Revenue Service (“IRS”), federal strike force/SWAT team members, and
North Las Vegas Police Department officers, alleging numerous constitutional
violations. (Id.) Specifically, the Second Amended Complaint (“SAC”) alleges that
Defendants retaliated against Plaintiffs for engaging in protected First Amendment
activity (“SAC,” Doc. # 104 at ¶¶ 21–27); used excessive force, unreasonably
detained Plaintiffs, and engaged in the unnecessary destruction of property and
other misconduct in the execution of search warrants, in violation of the Fourth
Amendment (id. at ¶¶ 27–39); violated Plaintiffs’ Fifth and Fourteenth Amendment
right to due process and freedom from compelled self-incrimination by using grand
jury proceedings to elicit evidence for use in civil tax cases (id. at ¶¶ 62–65),
utilizing warrant-less arrests and excessive force to coerce bystanders to submit to
interrogations (id. at ¶¶ 66–71), and failing to serve search warrants to lawful
tenants of property being searched (id. at ¶¶ 72–74); and, finally, conspired to
violate Plaintiffs’ First and Fourth Amendment rights (id. at ¶¶ 75–77). After years
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of litigation and several dispositive motions, many of Plaintiffs’ claims have been
disposed of.
II.
Procedural History
On October 30, 2003, Plaintiffs filed their first complaint seeking
injunctive relief against the United States and damages against unknown individual
federal employees and State of Nevada employees pursuant to Bivens v. Six
Unknown Fed. Narcotics Agents (“Bivens”), 403 U.S. 388 (1971) and 42 U.S.C.
§ 1983 as well as Nevada state law. (Doc. # 1.) On February 18, 2004, the Federal
Defendants filed Motions to Dismiss pursuant to Federal Rules of Civil Procedure
12(b)(1) and (6) or, in the alternative, for Summary Judgment (“2004 Motions”).
(Docs. ## 20–21.) On August 12, 2004, Plaintiffs filed their First Amended
Complaint. (Doc. # 53.) On October 4, 2004, United States District Judge Philip
M. Pro granted in part and denied in part Defendants’ 2004 Motions.1 (Pro Order.)
In his Order, Judge Pro found that under Ninth Circuit precedent, “no
Bivens action may lie for any alleged constitutional violation stemming from the
assessment and collection efforts of IRS agents whenever there [are] meaningful
and adequate protections available to the plaintiff” under the Tax Equity and Fiscal
1
For purposes of this Order, the Court will address in detail only those parts
of Judge Pro’s October 4, 2004 Order relating to Plaintiff Robert Kahre’s claims.
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Responsibility Act of 1982 (“TEFRA”). (Id. at 9.) Accordingly, he dismissed all
claims against IRS agents regarding alleged violations of First Amendment rights
and claims regarding the seizure of Robert Kahre’s gold, silver and other currency
to satisfy unpaid federal tax obligations. (Id. at 11, 23.) Judge Pro found that
Robert Kahre was not present when the challenged search warrants were executed
and thus did not have standing to challenge the defendants’ failure to knock and
announce and to present the warrant. (Id. at 10–11.) Judge Pro also dismissed
Robert Kahre’s claims regarding the sufficiency of the search warrant, all claims
arising from alleged violations of the Fifth Amendment protection against selfincrimination, and claims against Assistant United States Attorney (“AUSA”)
Gregory Damm (“Damm”) relating to the drafting of the search warrant application
and supporting affidavit. (Id. at 24.) Judge Pro denied Defendants’ 2004 Motions
with respect to Plaintiffs’ allegations that Defendant Damm planned every aspect of
an unlawful raid. (Id. at 24.) Judge Pro also denied Defendants’ 2004 Motions
with respect to Robert Kahre’s unlawful arrest claim. (Id. at 20–21.)
On April 5, 2005, a federal grand jury returned an indictment against
the majority of the Plaintiffs for charges relating to tax evasion. (Cr.
2:05–cr–00121–RCJ–RJJ, Doc. # 1.) On July 12, 2005, the Court stayed discovery
proceedings pending resolution of the criminal cases against eleven of the Plaintiffs
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in the instant action. (Doc. # 99.) On November 14, 2005, Plaintiffs filed a Second
Amended Complaint. (SAC.) On August 29, 2006, the Court refused to grant leave
for Plaintiffs to file a third amended complaint. (Doc. # 154.) On February 23,
2007, Plaintiff Robert Kahre commenced another lawsuit against many of the same
Defendants in the instant case, alleging numerous Racketeer Influenced and Corrupt
Organizations (RICO) violations.2 (See Cv. 2:07–cv–00231–DAE–RJJ.)
In 2009, three of the remaining Plaintiffs were adjudged guilty in their
criminal cases. (See Cr. 2:05–cr–00121–RCJ–RJJ.) Specifically, John Kahre
pleaded guilty to five counts of willfully attempting to evade and defeat tax (see Cr.
2:05–cr–00121–RCJ–RJJ, Docs. ## 605, 2614); Robert Kahre was found guilty of
multiple counts of conspiracy to defraud, willfully failing to collect and pay over
tax, attempting to interfere with the administration of the Internal Revenue law,
attempting to evade and defeat tax, and wire fraud (see Cr.
2:05–cr–00121–RCJ–RJJ, Docs. ## 1671, 2615); and Lori Kahre was found guilty
of multiple counts of conspiracy to defraud, attempting to interfere with the
administration of the Internal Revenue law, making a false statement to a bank and
2
This Court ultimately dismissed the myriad claims in that suit,
(Cv.2:07–cv–00231–DAE–RJJ, Doc. # 95), and was affirmed on appeal by the
Ninth Circuit (Cv. 2:07–cv–00231–DAE RJJ, Doc. # 107).
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attempting to evade and defeat tax (see Cr. 2:05–cr–00121–RCJ–RJJ, Docs.
## 1671, 2623).
The Court sua sponte lifted the stay in these proceedings on September
7, 2010. (Doc. # 225.) Only three Plaintiffs elected to proceed: Robert Kahre, Lori
Kahre, and Lee Belcher. (Doc. # 300 at 19.) On November 15, 2010, the Federal
Defendants filed a Motion to Dismiss or, in the Alternative, for Summary Judgment
(“Defendants’ 2010 Motion”). (Doc. # 254.) In its Order addressing Defendants’
2010 Motion, the Court identified five categories of claims that had not been
dismissed in Judge Pro’s October 4, 2004 Order granting in part and denying in part
Defendants’ 2004 Motions:
1.
2.
3.
4.
5.
Plaintiffs’ claims for unreasonable detention arising from the execution
of a search warrant at Kimberly Avenue;
Plaintiffs’ claims of excessive force by federal agents during the
execution of a search warrant at Kimberly Avenue;
Plaintiff Robert Kahre’s claim for unlawful arrest against Defendant
Halper;
Plaintiffs’ claims against Defendant Damm for the alleged planning of
unlawful raids;
Plaintiff Lori Kahre’s claim of unreasonable search and seizure.
(Doc. # 300 at 20.)
The Court determined that Defendants were entitled to summary
judgment with respect to the alleged misconduct at Kimberly Avenue, thus
disposing of Plaintiffs’ unreasonable detention and excessive force claims. (Id.)
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The Court noted that none of the remaining plaintiffs, including Robert Kahre, were
present at Kimberly Avenue when the alleged misconduct took place, and thus
“[did] not have standing to seek redress for constitutional injuries that other
individuals sustained there.” (Id. at 21–22.) The Court denied Defendants’ 2010
Motion with respect to Robert Kahre’s unlawful arrest claim, Lori Kahre’s claim
that federal agents unlawfully searched her residence, and the claim that AUSA
Damm planned unlawful raids. (Id. at 23, 28.) The Court found that Plaintiffs were
entitled to a continuance for purposes of conducting further discovery as to those
claims. (Id. at 28.)
The Federal Defendants then filed a Motion for Partial Summary
Judgment as to Robert Kahre's wrongful arrest claim on September 29, 2011. (Doc.
# 301.) On April 24, 2012, after a hearing on the Motion, the Court issued an Order
Granting Defendants’ Motion for Partial Summary Judgment, thereby disposing of
Robert Kahre’s wrongful arrest claim. (Doc. # 319.) On May 25, 2012, Robert
Kahre filed a Motion for Reconsideration of this Court’s April 24, 2012 Order.
(Doc. # 325.) On November 13, 2012, the Court denied the Motion for
Reconsideration. (Doc. # 354.)
On May 21, 2012, Defendants filed a Motion to Dismiss Plaintiff
Robert Kahre and Defendant Jared Halper. (“Mot.,” Doc. # 321.) On June 5, 2012,
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Plaintiff Robert Kahre filed a Combined Opposition to the Federal Defendants’: (1)
Motion to Quash Subpoenas Served by Robert Kahre and for a Protective Order
Regarding other Discovery Served by Him; and (2) Motion to Dismiss Plaintiff
Robert Kahre and Defendant Jared Halper. (“Opp.,” Doc. # 328.) On June 13,
2012, Defendants filed a Reply in further support of their Motion. (“Reply,” Doc.
# 331.)
DISCUSSION
Defendants move to dismiss Plaintiff Robert Kahre (“Kahre”) and
Defendant Jared Halper (“Halper”) from the case on the ground that Kahre’s last
remaining claim, which was also the last claim against Halper, was disposed of by
the Court’s April 24, 2012 Order Granting Defendants’ Motion for Partial Summary
Judgment (doc. # 319). Kahre contends that he has live claims remaining in the
case, including Fourth and Fifth Amendment claims for destruction of property and
a claim that Defendant Damm planned unlawful raids in retaliation for Plaintiffs’
protected First Amendment activity. (Opp. at 2.) Robert Kahre also contests the
Court’s grant of summary judgment on his unlawful arrest claim and asserts that he
is entitled to conduct discovery relating to that claim. (Id. at 12.)
At the outset, the Court notes that Defendants have not filed a motion
to dismiss Plaintiffs’ claims. Instead, Defendants ask the Court to find that Plaintiff
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Kahre’s claims have all been dismissed or otherwise disposed of. (See Mot. at 8
(“[T]he federal defendants submit that [the] Court should clarify that the wrongful
arrest claim . . . was Robert Kahre’s last remaining claim in this case and it should,
thus, dismiss Mr. Kahre from this suit.”).) Nevertheless, Defendants advance
arguments regarding the merits of the claims they maintain have already been
disposed of by prior judicial orders. For example, Defendants assert that Kahre’s
Fourth Amendment property destruction claim is barred by Heck v. Humphrey, 512
U.S. 477 (1994). (Mot. at 5.) Heck v. Humphrey stands for the proposition that a
plaintiff challenging “actions whose unlawfulness would render [his] conviction or
sentence invalid . . . must prove that the conviction or sentence has been reversed on
direct appeal, expunged by executive order, declared invalid by a state tribunal
authorized to make such determination, or called into question by a federal court's
issuance of a writ of habeas corpus.” 512 U.S. at 486–87. If Defendants wish to
assert that Heck warrants dismissal of Kahre’s Fourth Amendment claim, they may
file a motion to that effect. This Court, however, will not dismiss Kahre’s live
claims on that basis pursuant to a motion to dismiss Kahre himself on the ground
that all of his claims have already been dismissed.
Defendants also argue that, even if Kahre’s Fourth Amendment claims
have survived Defendants’ previous motions, the claims are barred by collateral
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estoppel. (Mot. at 5.) Collateral estoppel is an affirmative defense and must be
pled and proven by the party asserting it; in this case, Defendants. See Fed. R. Civ.
P. 8(c)(1); Taylor v. Sturgell, 553 U.S. 880, 907 (2008) (“Claim preclusion, like
issue preclusion, is an affirmative defense. . . . [I]t is incumbent on the defendant to
plead and prove such a defense.”); Shapley v. Nev. Bd. of State Prison Comm’rs,
766 F.2d 404, 407 (9th Cir. 1985) (“Since the government is raising the affirmative
defense of res judicata, it has the burden to allege facts that show [the plaintiff's]
opportunity to litigate this claim in the first action.”). Defendants’ conclusory
assertion that Kahre’s claims are barred by collateral estoppel falls far short of
meeting that burden. Again, this Court will not entertain challenges to Kahre’s
claims under the guise of a motion to dismiss the plaintiff himself. Accordingly,
this Order is limited to a determination of which, if any, of Kahre’s claims survive.
Kahre asserts that his Fourth Amendment claim for unnecessary
property destruction arising from the Kimberly Avenue search has not been
disposed of.3 (Opp. at 7.) He points out that no previous Court Order has explicitly
3
Kahre also asserts that a Fifth Amendment claim for unnecessary property
destruction remains live. (Opp. at 7.) The SAC does not appear to contain any
such claim, and Defendants do not address the existence of Kahre’s purported Fifth
Amendment claim in the instant Motion or in their Reply. However, for the
purposes of this Motion, the Court need not decide whether Plaintiff has
adequately stated a claim alleging property destruction in violation of the Fifth
Amendment. The parties are free to address this issue in subsequent motions.
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addressed that claim, and maintains that it remains live. (Id.) Defendants contend
that Judge Pro’s October 4, 2004 Order did, in fact, address and dispose of Kahre’s
property destruction claims. (Reply at 2–3.) The Court agrees with the Plaintiff,
and concludes that Kahre’s Fourth Amendment property destruction claim remains
live. Although the October 4, 2004 Order ostensibly addressed Kahre’s standing to
challenge the Defendants’ execution of the search warrants at issue (Pro Order at
10), Judge Pro expressly addressed only Kahre’s standing to challenge Defendants’
alleged knock and announce violation and failure to present the search warrant.4
There is no indication that the merits of Kahre’s property destruction claim were
considered in the October 4, 2004 Order. Nor was the property destruction claim
addressed in the Court’s September 2, 2011 Order.
Kahre also maintains that his claim against AUSA Damm for planning
unlawful raids survives. Defendants appear to acknowledge that the unlawful
planning claim against Damm has not been dismissed in any prior order. (See Mot.
at 3 (listing the claims remaining after Judge Pro’s October 4, 2004 Order and the
4
The October 24, 2004 Order stated that because Kahre was not present
when the relevant searches were conducted, he “has no standing to challenge the
failure to present the search warrant as well as the failure to knock and announce
before entering the businesses,” and therefore “dismiss[ed] Kahre’s claim
regarding Defendants’ failure to knock and announce or present the warrant upon
commencing the search.” (Id. at 11.)
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Court’s September 2, 2011 Order).) In light of the fact that Defendants do not
dispute in the instant Motion that the unlawful planning claim is still live, the Court
declines to find that this claim has been dismissed.5
Finally, Kahre asserts that he is entitled to discovery on his unlawful
arrest claim. (Opp. at 12.) The Court disagrees. The Court granted summary
judgment on that claim, and subsequently denied reconsideration of that issue.
(Docs. ## 325, 354.) Kahre’s unlawful arrest claim has been disposed of. That
5
In their Reply, Defendants argue for the first time that the unlawful
planning claim has, in fact, been dismissed. Defendants assert that Kahre’s First
Amendment claim against Damm was dismissed in Judge Pro’s October 4, 2004
Order when Judge Pro determined that no Bivens cause of action exists with
respect to claims against IRS Agents for misconduct committed while collecting
taxes because TEFRA provides adequate remedies for such misconduct. (Reply at
4.) Defendants also maintain that any claim against Damm that survived the
October 4, 2004 Order must, according to the language of the Order, relate to the
Fourth Amendment, and must therefore have been resolved in this case or the
related criminal case. (Id.) The Court is not convinced that these arguments have
merit; in particular, Defendants cite to no authority that would lead the Court to
conclude that Judge Pro’s reasons for dismissing Plaintiffs’ First Amendment
claims against IRS Agents are equally applicable to First Amendment claims
against an Assistant United States Attorney. In any event, the Court declines to
consider arguments raised for the first time in Reply. See Coos Cnty. Bd. of
Comm’rs v. Kempthorne, 531 F.3d 792, 812 n.16 (9th Cir. 2008) (declining to
consider an argument raised for the first time in a reply brief); Lucas v. Bell Trans.,
773 F. Supp. 2d 930, 939 n.2 (D. Nev. 2011) (noting that arguments raised for the
first time in reply will not be considered “as Plaintiffs did not have an opportunity
to respond to them”). If Defendants wish to argue that Plaintiffs’ unlawful
planning claim ought to be dismissed for failure to state a claim upon which relief
can be granted, they may file a motion to that effect.
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being so, Defendants ask the Court to dismiss Defendant Halper from the case on
the ground that the unlawful arrest claim was the last remaining claim against him.
Kahre contends that the SAC also states a live claim against Halper for conspiring
to plan unlawful raids with Defendant Damm. (Opp. at 22, 24.) To the extent
Kahre’s unlawful planning claim is brought under the First Amendment, it has been
disposed of with respect to Defendant Halper. (See Pro Order at 8–9.) However,
because it is not entirely clear to the Court on what basis Kahre continues to assert
an unlawful planning claim against Halper, and because this Court has not been
asked to consider the merits of Kahre’s claims, in an abundance of caution the
Court declines to dismiss Halper at this juncture.
The Court also notes that the SAC may contain other claims asserted
by Kahre that have not been dismissed in prior rulings or discussed in the instant
Motion and the supporting and opposing memoranda, such as Kahre’s claim of
unlawful detention (SAC ¶¶ 510(C), 510(D)). Given the length of the SAC and the
amount of claims asserted therein, as well as the long and complicated history of
this litigation, Kahre is instructed to submit within thirty (30) days from the date of
this Order a list of claims he still wishes to pursue and believes remain live, with
citations to the SAC, so that Defendants may respond to them.
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CONCLUSION
For the foregoing reasons, the Court DENIES Federal Defendants’
Motion to Dismiss Plaintiff Robert Kahre and Defendant Jared Halper. (Doc.
# 321.)
IT IS SO ORDERED.
DATED: Honolulu, Hawaii, November 28, 2012.
____________________________________
David Alan Ezra
United States District Judge
Charles Allen, et al. v. United States of America, et al., Cv. No. 03-01358 DAERJJ; ORDER DENYING FEDERAL DEFENDANTS’ MOTION TO DISMISS
PLAINTIFF ROBERT KAHRE AND DEFENDANT JARED HALPER
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