UNITED STATES OF AMERICA v. Dahmash's Personal Property, et al

Filing 52

ORDER denying 37 Motion to Dismiss and adopting 46 Memorandum and Recommendation - Signed by District Judge Louise Wood Flanagan on 3/14/2016. (Baker, C.)

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF NORTH CAROLINA
SOUTHERN DIVISION
NO. 7:14-CV-21-FL

UNITED STATES OF AMERICA,
Plaintiff,
v.
DAHMASH’S PERSONAL
PROPERTY, specifically described as
A 2011 TOYOTA RAV4, VIN:
2T3BF4DV7BW131686, and $11,845.45
in U.S. Currency,
Defendants.

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ORDER

This matter is before the court on claimant Mohammed Ahmed Ahmed Dahmash’s motion
to dismiss the complaint for lack of subject matter jurisdiction, lack of personal jurisdiction,
improper venue, and failure to state a claim upon which relief can be granted, made pursuant to
Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), 12(b)(3), and 12(b)(6). (DE 37). Pursuant to
28 U.S.C. § 636(b)(1) and Federal Rule of Civil Procedure 72(b), United States Magistrate Judge
Kimberly A. Swank entered a memorandum and recommendation (“M&R”) (DE 46), wherein it is
recommended that claimant’s motion be denied.

Claimant timely filed objections and the

government has responded in opposition. The issues raised are ripe for ruling. For the reasons
stated more specifically below, the court adopts the M&R as its own and denies claimant’s motion
to dismiss.

STATEMENT OF THE CASE
The government brought suit in rem against the defendant property on January 24, 2014,
pursuant to 21 U.S.C. § 881, to enforce Title II of the Controlled Substances Act, 21 U.S.C. §§ 801
et seq. The government alleges that the defendant property was “furnished or intended to be
furnished . . . in exchange for a controlled substance”; represents “proceeds traceable to such an
exchange”; or was “used or intended to be used to facilitate a[] violation of [the Controlled
Substances Act].” 21 U.S.C. § 881(a)(6).
On March 12, 2014, claimant, then represented by counsel, filed a claim and answer pursuant
to Rule G(5) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture
Actions. On July 14, 2015, claimant, proceeding pro se, filed the instant motion to dismiss.
Claimant suggests that this court lacks subject matter jurisdiction over this forfeiture case and
personal jurisdiction over him. In addition, claimant suggests that venue may not be laid in this
district and, further, that the government has failed to state a claim under 21 U.S.C. § 881.
Claimant’s motion was referred for M&R on August 26, 2015. M&R entered on January 5, 2016.
Therein, the magistrate judge recommends the court deny claimant’s motion. Claimant’s timely
objections followed on February 19, 2016.
STATEMENT OF THE FACTS
The complaint, which incorporates by reference the affidavit of Drug Enforcement Agency
Special Agent Harold W. Jordan (“Jordan Affidavit,” DE 1-1), when considered in the light most
favorable to the government, may be summarized as follows. On September 20, 2011, the
Jacksonville, North Carolina, Police Department (“JPD”) seized the defendant property in
connection with a consensual search of claimant’s business, Discount Tobacco, located in

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Jacksonville.

After receiving a tip that claimant was trafficking in synthetic cannabinoids

(commonly known as “spice”), JPD arrived at claimant’s business and observed a large quantity of
spice on display and available for sale. JPD notified claimant that spice was illegal under North
Carolina law and requested consent to search his business. Claimant gave both written and verbal
consent.
The search produced over 30,000 grams of spice, as well as a significant quantity of drug
paraphernalia and defendant $11,845.45. JPD seized the spice, paraphernalia, and currency. During
the search, JPD also found a cancelled check evidencing claimant’s recent purchase of defendant
2011 Toyota RAV4, as well as the vehicle’s title. The vehicle was seized upon the belief it
represented proceeds derived from the sale of spice. Following the seizure, claimant was arrested
by JPD and charged with a number of crimes under North Carolina law.
COURT’S DISCUSSION
A.

Standard of Review
The district court reviews de novo those portions of a magistrate judge’s M&R to which

specific objections are filed. 28 U.S.C. § 636(b). The court does not perform a de novo review
where a party makes only “general and conclusory objections that do not direct the court to a
specific error in the magistrate’s proposed findings and recommendations.” Orpiano v. Johnson, 687
F.2d 44, 47 (4th Cir. 1982). Absent a specific and timely filed objection, the court reviews only for
“clear error,” and need not give any explanation for adopting the M&R. Diamond v. Colonial Life
& Accident Ins. Co., 416 F.3d 310, 315 (4th Cir. 2005); Camby v. Davis, 718 F.2d 198, 200 (4th Cir.
1983). Upon careful review of the record, “the court may accept, reject, or modify, in whole or in
part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1).

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B.

Analysis
The court construes claimant’s pro se objections liberally. Nevertheless, upon de novo

review of the issues raised by his objections, the court finds claimant’s arguments unconvincing.1
1.

Subject Matter Jurisdiction

Claimant first objects to the M&R’s recommendation that his motion be denied inasmuch
as it challenges the court’s subject matter jurisdiction. A Rule 12(b)(1) motion challenges the
court’s subject matter jurisdiction, and the plaintiff bears the burden of showing that federal
jurisdiction is appropriate when challenged. McNutt v. Gen. Motors Acceptance Corp., 298 U.S.
178, 189 (1936); Adams v. Bain, 697 F.2d 1213, 1219 (4th Cir. 1982). The government has proved
subject matter jurisdiction.

Pursuant to 28 U.S.C. § 1355(a), this court has “original

jurisdiction . . . of any action or proceeding for the recovery or enforcement of any fine, penalty, or
forfeiture, pecuniary or otherwise, incurred under any Act of Congress.” 28 U.S.C. § 1355(a).
Thus, where the government asserts forfeiture under 21 U.S.C. § 881, this court has subject matter
jurisdiction over the case.
2.

Personal Jurisdiction

Claimant next objects to the M&R’s recommendation that his motion be denied inasmuch
as he contends that the court lacks personal jurisdiction. “When a district court considers a question
of personal jurisdiction based on the contents of a complaint and supporting affidavits, the plaintiff
has the burden of making a prima facie showing in support of its assertion of jurisdiction.”
Universal Leather, LLC v. Koro AR, S.A., 773 F.3d 553, 558 (4th Cir. 2014).

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Although the court construes claimant’s motion and objections liberally, certain aspects of claimant’s
argument are beyond the scope of the instant proceeding and, thus, are left unaddressed. For example, claimant
repeatedly attacks the soundness of his North Carolina conviction and the performance of his trial attorney. These issues
are not properly presented in the context of claimant’s motion.

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The government has proved jurisdiction over the defendant property. Claimant challenges
the court’s in personam jurisdiction. (See Motion, DE 37, at 11) (“This court’s record will show that
the Aggrieved party has never made a voluntary general appearance or admitted to this court’s claim
of jurisdiction.”). However, jurisdiction over claimant is unnecessary; the government brought this
forfeiture proceeding against the defendant property in rem. See United States v. Ursey, 518 U.S.
267, 288–89 (1996). This court may exercise jurisdiction in rem as long as the property is located
in this district. See Porsche Cars N. Am., Inc. v. Porsche.net, 302 F.3d 248, 256 (4th Cir. 2002); see
also 28 U.S.C. § 1355(b)(1). Here, the complaint alleges that the defendant property is located in
Jacksonville, a city in this district. In addition, the United States Marshal Service for this district
has taken and maintains possession of the defendant property. (See DE 4 (arrest warrant); DE 5
(evidencing arrest)). Accordingly, the court holds that it may exercise in rem jurisdiction over the
defendant property. Claimant’s suggestion that the court must have in personam jurisdiction is
without merit.
3.

Venue

Claimant next suggests that venue cannot be laid in this district. However “[a] civil
proceeding for the forfeiture of property may be prosecuted in any district where such property is
found.” 28 U.S.C. § 1395(b). As described above, the defendant property originally was located
and later was arrested in this district. Thus, venue properly lies in this district.
4.

Failure to State a Claim

Claimant finally suggests that the court should dismiss this case for failure to state a claim,
where the defendant property is not subject to forfeiture. A motion to dismiss under Rule 12(b)(6)
tests the legal sufficiency of the complaint but “does not resolve contests surrounding the facts, the

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merits of a claim, or the applicability of defenses.” Republican Party v. Martin, 980 F.2d 943, 952
(4th Cir. 1992); see also Edwards v. City of Goldsboro, 178 F.3d 231, 243–44 (4th Cir.1999). A
complaint states a claim under 12(b)(6) if it contains “sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
(quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “The plausibility standard is not
akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has
acted unlawfully.” Id.
Claimant’s argument invokes two related considerations. First, claimant suggests that a
federal forfeiture is inappropriate, where the defendant property was seized by JPD, a local law
enforcement agency.

Second, claimant suggests that, even assuming federal forfeiture is

appropriate, the defendant property is not subject to forfeiture where he was charged with a crime
under state law only. The court addresses each argument in turn.
Claimant first contends that the defendant property is not subject to federal forfeiture, where
it was seized by JPD. Pursuant to 21 U.S.C. § 881(a), all controlled substances, as well as moneys
and proceeds traceable to controlled substances, are subject to forfeiture “and no property right shall
exist in them.” 21 U.S.C. § 881(a). Thus the statute does not impose any limitation on the
government’s ability to seek forfeiture of money exchanged for controlled substances, or the
proceeds of transactions involving controlled substances, related to the jurisdiction of the seizing
agency. Moreover, cooperative law enforcement is specifically contemplated by § 881(e), which
allows the proceeds from forfeited property to be shared with “any State or local law enforcement
agency which participated directly in the seizure or forfeiture of the property.” § 881(e)(1)(B).
Finally, federal authorities permissibly may, and frequently do, “adopt” seizures carried out by local

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law enforcement agencies, such as JPD. See United States v. Winston-Salem/Forsyth Cty. Bd of
Educ., 902 F.2d 267, 271–72 (4th Cir. 1990). Accordingly, the fact that the defendant property was
seized by a local law enforcement agency has no bearing on its forfeitability.
Claimant next contends that the defendant property is not subject to forfeiture under the
Controlled Substances Act, where he was criminally charged under North Carolina law only.
However, § 881 does not require forfeiture actions be preceded by any criminal charge or
conviction, much less a charge or conviction under federal law. See § 881. Rather, property is
subject to civil forfeiture where it was “furnished or intended to be furnished . . . in exchange for a
controlled substance”; represents “proceeds traceable to such an exchange”; or was “used or
intended to be used to facilitate any violation of [the Controlled Substances Act].” § 881(a)(6).
Thus, the complaint and Jordan Affidavit satisfy the government’s pleading obligations. Read
together those documents plausibly allege that spice is a controlled substance listed in Schedule I
of the Controlled Substances Act; defendant $11,845.45 was found in claimant’s place of business
and is reasonably believed to be money exchanged for spice; and defendant 2011 Toyota RAV4 is
reasonably believed to be the proceeds of transactions involving spice.
In sum, claimant’s motion to dismiss for failure to state a claim must be denied. The fact that
the defendant property was seized by local law enforcement is of no moment and does not affect the
forfeitability of the defendant property. In addition, the fact that claimant was charged only under
state law does not affect the forfeitability of the defendant property.

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CONCLUSION
Based on the foregoing, upon de novo review of those portions of the M&R to which specific
objections were made, and considered review of the remainder thereof, the court ADOPTS the M&R
as its own and DENIES claimant’s motion to dismiss.
SO ORDERED, this the 14th day of March, 2016.
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_____________________________
LOUISE W. FLANAGAN
United States District Judge

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