United States of America v. 208 Burberry Handbags et al
DECISION AND ORDER denying 11 Motion to Dismiss for Failure to State a Claim; denying 19 Motion to Strike. The Court finds that Brighton Trading has made a sufficient claim to show standing under both the U.S. Constitution Article III and the forfeiture statute. Accordingly, the Governments motion to strike, ECF No. 19, is denied. Brighton Tradings motion to dismiss, ECF No. 11, is also denied. The Governments complaint is sufficient.Signed by Hon. Charles J. Siragusa on 11/1/12. (KAP)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
UNITED STATES OF AMERICA,
DECISION and ORDER
208 BURBERRY HANDBAGS, et al.,
BRIGHTON TRADING, INC.,
Mary C. Kane, A.U.S.A.
United States Attorney’s Office
138 Delaware Avenue
Buffalo, NY 14202
John Peter Bostany, Esq.
Bostany Law Firm
40 Wall Street, 61st Floor
New York, NY 10005
Siragusa, J. This is an action in rem for forfeiture pursuant to 18 U.S.C. §§
2323(a)(1)(A) and (a)(1)(B). Before the Court is a motion to dismiss the Government’s
forfeiture complaint brought by Claimant Brighton Trading, Inc. (“Brighton Trading” or “the
claimant”) pursuant to Federal Rule of Civil Procedure 12(b)(6), ECF No. 11, and the
Government’s motion to strike Brighton Trading’s claim pursuant to Rule G(8)(c) of the
Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions
(“Supplemental Rules”), ECF. No. 19. For the reasons stated below, both motions are
Based upon a joint investigation conducted by U.S. Immigration and Customs
Enforcement and the New York State Police, the Government has alleged that Fan Zhang
(“Zhang”) and her family members were involved in the sale and distribution of large
quantities of counterfeit merchandise. Verified Complaint for Forfeiture (“Compl.”) ¶ 6,
ECF No. 1; see also Mem. of Law in Supp. of Mot. to Strike Claim at 2, ECF No. 20. The
investigation included: (1) New York State and federal wire communication intercept
Orders for Zhang’s cellular telephone, (2) law enforcement agents and a confidential
informant (“CI”) making undercover purchases of counterfeit purses, (3) physical
surveillance, and (4) border searches of containers imported by Zhang’s suppliers.
As a result of the investigation, it was determined that unmarked merchandise was
imported into the United States from China. Once imported, the merchandise was stored
in a warehouse at Brighton Trading, located in Secaucus, New Jersey. It was later
transferred to the store front of a business known as J&J Space, also known as D&K
America, Inc. (“D&K”), located in New York, New York. Bing H. Huang is the owner of
both D&K and Brighton Trading. Compl. ¶¶ 8–11.
Zhang, along with her husband, Deno Delregno (“Delregno”) purchased the
imported merchandise from D&K in New York City and transported it to their residence
in Rochester, New York. Once there, Zhang and her family would allegedly affix
“counterfeit tags and labels to previously unmarked merchandise in order to create a
counterfeit product.” Compl. ¶ 8.
Surveillance at D&K revealed that Zhang and Delregno entered the store on
several occasions. Agents also observed a number of garbage bags from the store being
placed in their vehicle, which were then observed being removed from the vehicle and
placed inside their residence upon their return to Rochester, New York. “Furthermore,
while conducting surveillance at D&K on at least two (2) occasions, agents observed a
van registered to Brighton Trading, Inc. and with the name Brighton Trading, Inc. . . .
printed on the side of the van, arrive at the D&K store.” Mem. of Law in Supp. of Mot. to
Strike Claim at 3; Compl. ¶¶ 15–18. On one such occasion, the van was followed from
D&K to the Brighton Trading warehouse in Secaucus, New Jersey. Compl. ¶ 19.
Furthermore, a CI made three undercover purchases from D&K during August
2010. Compl. ¶¶ 24–27. The CI purchased a total of sixty-two purses. With each
purchase, the CI received a bag of purses along with a smaller bag that contained brand
name tags. Inside the store, the CI observed generic purses, without brand name tags,
displayed. “The CI explained that after a customer picked out a purse to purchase,
employees working inside D&K would tell the customer the brand name that the purse will
be converted into.” Compl. ¶ 25.
Finally a container consigned to D&K was inspected by U.S. Customs and Border
Protection (“CBP”). The purses and tags in the container were “confusingly similar” to
Dolce & Gabbana merchandise. Compl. ¶ 22. In connection with the investigation, the
merchandise was allowed to be imported into the United States. Subsequently, a D&K
representative picked up the shipment and transported it to the Brighton Trading
warehouse in Secaucus, New Jersey. Compl. ¶ 23.
On September 29, 2010, search warrants were executed at D&K in New York,
New York, and Brighton Trading in Secaucus, New Jersey, as well as at Zhang’s and
Delregno’s residence in Rochester, New York, resulting in the seizure of large quantities
of counterfeit and generic merchandise. Compl. ¶¶ 29–31 (listing the items seized).
Additionally, on September 29, 2010, Zhang, Delregno and other family members were
charged with conspiracy to defraud the United States pursuant to 18 U.S.C. § 371 and
trafficking in counterfeit goods pursuant to 18 U.S.C. § 2320. A Federal grand jury
indicted them on those charges on April 3, 2012. See Mem. of Law in Supp. of Mot. to
Strike Claim at 6 (providing details of the criminal charges and indictment, including those
who were charged and indicted). Bing H. Huang is the target of a pending criminal
investigation in the Western District of New York. Compl. ¶ 33.
By letter dated January 21, 2011, Brighton Trading filed an administrative petition
for relief with CBP. C.J. Erickson, Esq., letter to Rachael Yong Yow, Jan. 21, 2011, at
1–5, ECF No. 12-2. Thereafter, in a letter dated January 28, 2011, Edward P. Nagle
(“Nagle”), Director, Office of Fines, Penalties, and Forfeitures for U.S. Customs and
Border Protection, informed C.J. Erickson, attorney for Brighton Trading, that, “case
2010-4601-001015-01 against Brighton Trading Inc., has been accepted by the United
States Attorney’s Office, Western District of New York, for judicial forfeiture proceedings.”
ECF No. 12-2 at 18. The letter was copied to Brighton Trading, but not the U.S. Attorney
for the Western District of New York. Pl’s Supplemental Mem. of Law at 14, Sept. 14,
2012, ECF No. 28.
On May 3, 2011, the petition for remission package was returned to Assistant
United States Attorney Mary Clare Kane (“Kane”), by Tim Virtue (“Virtue”), Deputy Chief,
Asset Forfeiture and Money Laundering Section (“AFMLS”). An included notice indicated
that the package was incomplete because there was no civil or judicial order of forfeiture
or administrative declaration of forfeiture. Kane Aff. Ex. D, ECF No. 17-4.
On January 9, 2012, the Government filed its Verified Complaint for Forfeiture,
ECF No. 1, and the Court issued an arrest warrant in rem. See Arrest Warrant In Rem,
United States v. 208 Burberry Handbags, No. 12-CV-6015-CJS (W.D.N.Y. Mar. 5, 2012),
ECF No. 9. On January 11, 2012, “Direct Notice of Forfeiture Action was mailed via
regular and certified mail to Brighton Trading, Inc, Bing H. Huang, C.J. Erickson, Esq.,
and John P. Bostany, Esq.” Kane Aff. in Supp’t of Gov’t’s Mot. to Strike Claim ¶ 4, Jun.
1, 2012, ECF No. 19. “Notice of this action was [also] published on an official internet
government site (www.forfeiture.gov) for 30 consecutive days[,]” beginning January 12,
2012, and ending February 10, 2012. Id. ¶ 5.
On February 9, 2012, Brighton Trading filed a claim pursuant to Supplemental Rule
G(5), in which it represented that “Claimant is the owner of the above listed property.”
Seized Asset Claim Form, Request for Forfeiture Proceedings in Federal Court, Jan. 31,
2012, ECF No. 4. Thereafter, on April 23, 2012, Brighton Trading filed a Motion to
Dismiss the Government’s complaint for forfeiture pursuant to Rule 12(b)(6) for failure to
state a claim upon which relief may be granted, ECF No. 11, and on June 1, 2012, the
Government filed a Motion to Strike Claim, ECF No. 19. Both motions are presently
before the Court. Following oral argument, the Court directed both sides to submit
supplemental briefing on the question of the effect, if any, of the Nagle letter. Both sides
having done so, and the Court having considered all the papers filed, now renders this
STANDARD OF LAW
Motion to Strike a Claim
Under the Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”),
In any case in which the Government files in the appropriate United States
district court a complaint for forfeiture of property, 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 Supplemental Rules for Certain
Admiralty and Maritime Claims, except that such claim may be filed not later
than 30 days after the date of service of the Government’s complaint or, as
applicable, not later than 30 days after the date of final publication of notice
of the filing of the complaint.
18 U.S.C. § 983(a)(4)(a) (2009). In order to assert a claim against civil forfeiture, a
claimant must demonstrate both Article III constitutional standing and CAFRA statutory
standing. See United States v. Cambio Exacto, S.A., 166 F.3d 522, 526 (2d Cir. 1999)
(“In order to contest a governmental forfeiture action, claimants must have both standing
under the statute or statutes governing their claims and standing under Article III of the
Constitution as required for any action brought in a federal court.”); United States v.
Assets Described in Attachment A to the Verified Complaint Forfeiture in Rem, 799 F.
Supp. 2d 1319, 1326 (M.D. Fla. 2011) (citing United States v. $38,000.000 in United
States Currency, 816 F.2d 1538, 1543, 1545 (11th Cir. 1987).
To establish Article III standing, “a claimant must demonstrate a legally cognizable
interest in the defendant property.” United States v. Vehicle 2007 Mack 600 Dump Truck,
VIN 1m2k189c77m036428, 680 F. Supp. 2d 816, 822-23 (E.D. Mich. 2010) (citing United
States v. One 2001 Cadillac Deville Sedan, 335 F. Supp. 2d 769, 772 (E.D. Mich. 2004)
(internal quotations omitted). To establish statutory standing, a claimant must comply with
the requirements of 18 U.S.C. 983(a)(4)(A) and Supplemental Rules G(5) and G(6).
United States v. $39,557.00, More or Less, in U.S. Currency, 683 F. Supp. 2d 335, 338
(D.N.J. 2010). The claimant has the burden of proof in establishing standing. United
States v. Currency: $4,424.00 (U.S.), 91-CV-1022, 1994 WL 568594 (N.D.N.Y. Sept. 30,
1994) (citing Mercado v. United States Customs Services, 873 F.2d 641, 644-45 (2d Cir.
“Generally, courts have held claimants to strict compliance with the provisions of
Rule G(5).” Vehicle 2007 Mack 600 Dump Truck, 680 F. Supp. 3d at 823 (internal
citations omitted). Supplemental Rule G(5) provides that:
A person who asserts an interest in the defendant property may contest
the forfeiture by filing a claim in the court where the action is pending. The
(A) identify the specific property claimed;
(B) identify the claim and state the claimant’s interest in the property;
(C) be signed by the claimant under penalty of perjury; and
(D) be served on the government attorney designated under Rule
G(4)(a)(ii)(C) or (b)(ii)(D).
Fed. R. Civ. P. Supp’l Admiralty & Maratime Claims Rule G(5).
As to an individual claiming ownership over specific property, the term “owner” is
defined as, “a person with an ownership interest in the specific property sought to be
forfeited, including a leasehold, lien, mortgage, recorded security interest, or valid
assignment of an ownership interest.” 18 U.S.C. § 983(d)(6)(A).
Courts have exhibited conflicting views on the amount of information necessary
to satisfy the claim of ownership. $39, 557.00, More or Less, in U.S. Currency, 683 F.
Supp. 2d at 339. The Southern District of Ohio has held that a claim of ownership is
sufficient to state an interest in the property. See United States v. Forty Thousand Dollors
($40,000.00) in U.S. Currency, 763 F. Supp. 1423, 1426-27 (S.D. Ohio 1991) (“Nowhere
in Supplemental Rule [G(5)] is there a requirement that the Claimant explain how or when
his or her interest began. Those issues become important later in a forfeiture proceeding,
but need not be included in the claim.”). In contrast, the Fifth Circuit has held that “a bare
assertion of ownership of the res, without more, is inadequate to prove an ownership
interest sufficient to establish standing.” United States v. $38,570 U.S. Currency, 950
F.2d 1108, 1112 (5th Cir. 1992).
In this Circuit, the Court of Appeals has determined that, “a naked claim of
possession … is not enough. There must be some indication that the claimant is in fact
a possessor, not a simple, perhaps unknowing custodian, some indicia of reliability or
substance to reduce the likelihood of a false or frivolous claim.” Mercado v. U.S. Customs
Service, 873 F.2d 641, 645 (2d Cir. 1989). Generally, a claim of ownership with
supporting evidence is enough to establish standing. United States v. Premises & Real
Prop. With Bldgs., Appur. & Improv. at 191 Whitney Pl., 98-CV-0060 E, 2000 WL
1335748 (W.D.N.Y. Sept. 7, 2000) (citing Torres v. $36,256.80 U.S. Currency, 25 F.3d
1154, 1158 (2d Cir. 1994)). Additional evidence is not required to establish standing
where the Government admits the claimant’s relationship to the property in its complaint.
$38,570 U.S. Currency, 950 F.2d at 1113.
Pursuant to Supplemental Rule G(8)(c)(i)(A), the Government may move to strike
a claim, at any time before trial, for failing to comply with Rule G(5). Additionally, a motion
to strike a claim “must be decided before any motion by the claimant to dismiss the
action.” Fed. R. Civ. P. Supp’l Admiralty & Maratime Claims Rule G(8)(c)(ii)(A).
Motion to Dismiss
The U.S. Supreme Court, in Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007),
clarified the standard to be applied to a 12(b)(6) motion:
Federal Rule of Civil Procedure 8(a)(2) requires only a short and plain
statement of the claim showing that the pleader is entitled to relief, in order
to give the defendant fair notice of what the claim is and the grounds upon
which it rests. While a complaint attacked by a Rule 12(b)(6) motion to
dismiss does not need detailed factual allegations, a Plaintiff’s obligation
to provide the grounds of his entitlement to relief requires more than labels
and conclusions, and a formulaic recitation of the elements of a cause of
action will not do. Factual allegations must be enough to raise a right to
relief above the speculative level, on the assumption that all the
allegations in the complaint are true (even if doubtful in fact).
Id. at 1964-65 (citations and internal quotations omitted).
See also, ATSI
Communications, Inc. v. Shaar Fund, Ltd., 493 F.3d 87, 98 (2d Cir. 2007) (“To survive
dismissal, the plaintiff must provide the grounds upon which his claim rests through
factual allegations sufficient ‘to raise a right to relief above the speculative level.’”)
(quoting Bell Atl. Corp. v. Twombly) (footnote omitted); Iqbal v. Hasty, 490 F.3d 143 (2d
Cir. 2007) (Indicating that Bell Atl. Corp. v. Twombly adopted “a flexible ‘plausibility
standard,’ which obliges a pleader to amplify a claim with some factual allegations in
those contexts where such amplification is needed to render the claim plausible[,]” as
opposed to merely conceivable.)
When applying this standard, a district court must accept the allegations contained
in the complaint as true and draw all reasonable inferences in favor of the nonmoving
party. Burnette v. Carothers, 192 F.3d 52, 56 (1999), cert. denied, 531 U.S. 1052 (2000).
“However, there is a narrow exception to this rule for factual assertions that are
contradicted by the complaint itself, by documents upon which the pleadings rely, or by
facts of which the court may take judicial notice.” Perry v. NYSARC, Inc., No.
10–5177–CV, 424 Fed. Appx. 23, 25, 2011 WL 2117950 at *2 (2d Cir. May 27, 2011).
Furthermore, “[c]onclusory allegations of the legal status of the defendants’ acts need not
be accepted as true for the purposes of ruling on a motion to dismiss.” Hirsch v. Arthur
Andersen & Co., 72 F.3d 1085, 1092 (2d Cir. 1995)(citing In re American Express Co.
Shareholder Litig., 39 F.3d 395, 400-01 n. 3 (2d Cir.1994)). As the Supreme Court
clarified in Ashcroft v. Iqbal, 556 U.S. 662 (2009):
Threadbare recitals of the elements of a cause of action, supported by
mere conclusory statements, do not suffice. Id., at 555, (Although for the
purposes of a motion to dismiss we must take all of the factual allegations
in the complaint as true, we “are not bound to accept as true a legal
conclusion couched as a factual allegation” (internal quotation marks
omitted)). Rule 8 marks a notable and generous departure from the
hyper-technical, code-pleading regime of a prior era, but it does not unlock
the doors of discovery for a plaintiff armed with nothing more than
conclusions. Second, only a complaint that states a plausible claim for
relief survives a motion to dismiss. Id., at 556. Determining whether a
complaint states a plausible claim for relief will, as the Court of Appeals
observed, be a context-specific task that requires the reviewing court to
draw on its judicial experience and common sense. 490 F.3d at 157-158.
But where the well-pleaded facts do not permit the court to infer more than
the mere possibility of misconduct, the complaint has alleged—but it has
not “show[n]”—“that the pleader is entitled to relief.” Fed. Rule Civ. Proc.
Iqbal, 556 U.S. at 678–79 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007)).
Supplemental Rule G(2)
In the action presently before the Court, the pleadings are controlled by
Supplemental Rule G(2), which requires that a complaint:
(a) be verified;
(b) state the grounds for subject-matter jurisdiction, in rem jurisdiction over
the defendant property, and venue;
(c) describe the property with reasonable particularity;
(d) if the property is tangible, state its location when any seizure occurred
and—if different—its location when the action is filed;
(e) identify the statute under which the forfeiture action is brought; and
(f) state sufficiently detailed facts to support a reasonable belief that the
government will be able to meet its burden of proof at trial.
Fed. R. Civ. P. Supp’l Admiralty & Maratime Claims Rule G(2).
Motion to Strike Claim
The Government argues that Brighton Trading has failed to comply with
Supplemental Rule G(5), in as much it has failed to state its interest in the property.
Brighton Trading’s Claim merely states, “Claimant is the owner of the above listed
property,” while failing to provide any evidence in support thereof. Therefore, the
Government argues that Brighton Trading has no standing to bring a claim against the
forfeiture action, and moves to strike its claim pursuant to Supplemental Rule (G)(8)(c).
In response, Brighton Trading argues that they need not provide additional evidence of
ownership because the Government’s complaint alleges that Brighton Trading has an
interest in the property.
Supplemental Rule G(5) is silent as to what information is necessary. In fact, the
rule requires only that the claimant and the claimant’s interest in the property be
identified. Moreover, the advisory committee notes make no mention of requiring
additional evidence to support a claimant’s interest in the property. Fed. R. Civ. P. Supp’l
Admiralty & Maratime Claims Rule G advisory committee’s note, subdiv. 5.
To the extent that Supplemental Rule G does not address the issue, the Court may
turn to Supplemental Rule C. See Fed. R. Civ. P. Supp’l Admiralty & Maratime Claims
Rule G(1) (“[t]o the extent that this rule does not address an issue, Supplemental Rule
C . . . also appl[ies].”). Supplemental Rule C(6)(a)(ii) provides that “the statement of right
or interest must describe the interest in the property that supports the person’s demand
for its restitution or right to defend the action.” Again, both the Rule and the advisory
committee’s notes are silent as to how much information is necessary to describe a
claimant’s interest in the property. Had Congress intended for additional evidence of a
claimant’s interest in the property be provided, it could have provided for such a
requirement in the rule. The lack of such a requirement cautions against imposing one
on Brighton Trading.
The Court acknowledges that in the Second Circuit blanket assertions of
ownership are insufficient to establish a claim, and that when the Government, as here,
has provided notice through publication, there is, of course, a risk of false claims.
Therefore, a bald assertion of ownership, without more, could result in the Court
entertaining a claim by an individual with no standing whatsoever. U.S. v. $39, 557.00,
More or Less, in U.S. Currency, 683 F. Supp. 2d 335, 339 (D.N.J. 2010) (citing United
States v. $487,825.00 in U.S. Currency, 484 F.3d 662, 665 (3d Cir. 2007)); United States
v. $38,570 U.S. Currency, 950 F.2d 1108, 1112-23 (5th Cir. 1992). However, the Court
notes that such a risk is not present in this case.
Here, the Government has made allegations of Brighton Trading’s interest in the
property: (1) the investigation revealed Brighton Trading’s involvement when it stored the
merchandise in its warehouse located in Secaucus, New Jersey, before the merchandise
was transported to the store front of D&K in New York, New York, Compl. ¶ 10; (2) both
Brighton Trading and D&K are owned by the same individual, Bing H. Huang, Compl.
¶ 10; (3) the merchandise was seized from Brighton Trading, Compl. ¶ 29; and (4) the
Government alleges in their complaint that Brighton Trading and Bing H. Huang may have
an interest in the property, Compl. ¶ 39.
Although the Government argues that possession of the property at the time of
seizure is of no importance when it comes to establishing ownership, it also alleges, on
information and belief, that Brighton Trading and Bing H. Huang may have an interest in
the property. Compl. ¶ 39. This allegation coupled with the silence of Rule G(5) in regard
to what additional evidence, if any, is required, and the facts surrounding the investigation
as alleged in the complaint, mitigate the likelihood that Brighton Trading’s claim is false.
Consequently, the Court finds that Brighton Trading’s assertion of ownership, in
combination with the facts alleged in the complaint, are sufficient to establish Article III
and statutory standing to bring a claim against the forfeiture action.
Motion to Dismiss
In its motion to dismiss, Brighton Trading claims that the Government has failed
to timely file a forfeiture complaint. Additionally, it claims that the Government has failed
to allege the property at issue, specifically the generic merchandise, is contraband subject
Pursuant to CAFRA,
Not later than 90 days after a claim has been filed, the Government shall
file a complaint for forfeiture in the manner set forth in the Supplemental
Rules for Certain Admiralty and Maritime Claims or return the property
pending the filing of a complaint, except that a court in the district in which
the complaint will be filed may extend the period for filing a complaint for
good cause shown or upon agreement of the parties.
18 U.S.C.A. § 983(a)(3)(A). The parties dispute whether Brighton Trading filed a “claim”
sufficient to trigger the 90-day statutory period for this forfeiture action.
Brighton Trading argues that it filed its claim on January 21, 2011, and that the
Government did not file a complaint for forfeiture until nearly one year later on January
9, 2012. The Government responds that what Brighton Trading filed was a petition for
remission with CBP, which is not a claim under Rule G(5), therefore, the time period in
18 U.S.C. § 983(a)(3)(A) is inapplicable.
The November 2010 notice to Brighton Trading from CBP informed the claimant
that it could choose either to petition CBP for relief, or indicate a desire to have Customs
begin appropriate forfeiture proceedings:
If you decide to petition for relief, you must check the first box on the
enclosed Election of Proceeding/Waiver form indicating that you wish this
office to consider your petition administratively. Checking the second box
indicates that you desire Customs to begin appropriate forfeiture
proceedings. No matter which box you check, you must also sign and
return the form.
Edward P. Nagle letter to Brighton Trading at 2, Nov. 2010, ECF No. 12-1. Mr. Erickson’s
letter to CBP on behalf of Brighton Trading stated, inter alia, “we request that Customs
remit all merchandise for entry and/or export under Customs supervision in compliance
with existing policy, statutory and regulatory provisions, and as supported by the
mitigation guidelines,” and limit any monetary fine.1 C.J. Erickson, Esq., letter to Rachael
Yong Yow, Jan. 21, 2011, at 5. Nagle’s response to Erickson specifically stated that CBP
would, “hold your case in abeyance pending notification from the AUSA.” Edward P.
Nagle letter to C.J. Erickson, Jan. 28, 2011, at 1.
“A petition for remission or mitigation of forfeiture is a petition for administrative
relief, not judicial relief.” United States v. $86,496.00 in U.S. Currency, CV-07-1693-PHXDGC, 2000 WL 2039355 (D. Ariz. May 12, 2008) (holding that a petition filed “with the
DEA does not constitute a valid claim for purposes of Rule G(5).”). In Malladi Drugs &
Pharmaceuticals, Ltd. v. Tandy, 538 F. Supp. 2d 162 (D.D.C. 2008), a district court faced
with an argument similar the claimant’s here held that:
[a] petition for remission or mitigation of forfeiture is an entirely different
creature. It is created by regulation, not law. An application for a petition
requires more information than a claim. It is decided by a Ruling Official,
not a judge, and only one administrative level of review is available. The
grant of remission or mitigation is discretionary.
Since all petitions require more information than the three pieces of
information formally required for a claim, Plaintiffs’ argument that their
Petitions were also Claims, if accepted, would require seizing agencies to
treat all petitions as claims and to refer all petitions for judicial forfeiture.
That clearly was not the intent of Congress when it established the claims
Malladi Drugs & Pharmaceuticals, Ltd., 538 F. Supp. 2d at 169–70.
The exhibits do not include any copy of the form showing that Brighton Trading or Mr.
Erickson checked one of the boxes.
Thus, because Brighton Trading filed a petition for administrative relief, the ninety
days to file a complaint for forfeiture provided by 18 U.S.C. § 983(a)(3)(A) is inapplicable
here. Brighton Trading also argues that Nagle’s January 28, 2011, letter, discussed
above, transformed its administrative claim into a valid Rule G(5) claim. See Edward P.
Nagle letter to C.J. Erickson, Esq., Jan. 28, 2011, ECF No. 12-2 at 18. As did the District
Court in the District of Columbia, this Court rejects this argument. Nagle’s letter merely
informed Brighton Trading’s attorney of the acceptance of the case by the U.S. Attorney,
and that CBP would hold the administrative petition in abeyance. It did not act to convert
Brighton Trading’s petition for administrative relief into a Rule G(5) claim and thereby
trigger the time period of 18 U.S.C. § 983(a)(3)(A).2 See, e.g., West Chevrolet, Inc. v.
United States, Civil No. WDQ-09-1454, 2009 WL 3488395, *3 (D. Md. Oct. 22, 2009) (“By
filing the Petition, West Chevrolet agreed to have its interest in the car determined by the
Secret Service-not the district court.”).
Turning to the question of whether the seized items were contraband, subject to
forfeiture, the claimant contends that,
Brighton Trading, Inc.’s property consists of certain generic, unmarked
handbags, wallets, briefcases, small purses and metal tags. Declaration
of Stephanie A. Prince, Esq. Such items cannot be said to be intrinsically
illegal, or contraband per se. In fact, nowhere in the complaint does the
government even allege that the seized items are contraband.
The Government further argues that the applicable test for a due process violation was
formulated by the Supreme Court in United States v. $8,500 in U.S. Currency, 461 U.S. 555, 564
(1983) and that it applies here. Brighton Trading, however, is not making a due process
argument, but is relying solely on its argument under 18 U.S.C. § 983(a)(3)(A). Claimant’s Reply
Mem. of Law in Supp’t of Mot. to Dismiss at 3–4, Jun. 11, 2012, ECF No. 22. Consequently, the
Court will not address the Government’s due process argument.
Claimant’s Mem. of Law in Supp’t of Mot. to Dismiss at 4,3 Apr. 23, 2012, ECF No. 14.
The Government’s response is that the generic property was used to facilitate the sale
of counterfeit merchandise. Gov’t’s Mem. of Law in Opp’n to Claimant’s Mot. to Dismiss
at 17. The Complaint sufficiently alleges this. Compl. ¶¶ 33, 37. The Court determines
that the factual recitation plausibly supports the Government’s theory that the generic
materials were imported for the purpose of easily converting them into counterfeit goods.
The Court finds that Brighton Trading has made a sufficient claim to show
standing under both the U.S. Constitution Article III and the forfeiture statute.
Accordingly, the Government’s motion to strike, ECF No. 19, is denied. Brighton
Trading’s motion to dismiss, ECF No. 11, is also denied. The Government’s complaint
IT IS SO ORDERED.
Dated: November 1, 2012
Rochester, New York
/s/ Charles J. Siragusa
CHARLES J. SIRAGUSA
United States District Judge
Contrary to the requirement of W.D.N.Y. Loc. R. Civ. P. 10(a)(5), Brighton Trading’s
memorandum of law’s pages are not numbered. The Court has used the numbering assigned
by Acrobat’s portable document format as found in the Court’s Electronic Case Filing system.
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