692 F. App'x 666
2d Cir.2017Background
- IRS (Koskinen) appealed a district court order (June 4, 2015) denying the Government’s motion to dismiss and for summary judgment and ordering return/destruction of documents seized from 100 Grist Mill Road, Simsbury, CT.
- District court denied Government’s motion for reconsideration on Feb 5, 2016, stayed the June 4 Order, and conditioned reconsideration on the Second Circuit’s ruling in United States v. Ganias.
- Related criminal prosecution of Daniel Carpenter proceeded; a D. Conn. judge denied a similar Rule 41(g) motion in the criminal case, and Carpenter was later convicted (proceedings ongoing as of the opinion).
- The Second Circuit panel noted intervening developments: the Ganias panel decision relied on by the district court was vacated by the en banc Second Circuit in United States v. Ganias (824 F.3d 199 (2d Cir. 2016)).
- At oral argument, parties narrowed disputes: Government objects only to returning documents relevant to the criminal case; plaintiffs seek return of documents not relevant to the criminal case and do not object to retention of relevant documents while criminal proceedings are pending.
- The panel declined to resolve complex appellate-jurisdiction questions and remanded to the district court for further proceedings in light of changed circumstances, retaining jurisdiction for expedited review on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court should order return/destruction of seized documents under Rule 41(g) | Carpenter/Grist Mill: seized documents not relevant to criminal case should be returned/destroyed | Government: objects to return of documents relevant to criminal proceedings; chain-of-custody concerns | Remanded for district court to reconsider in light of changed law and circumstances; stay remains in place; court reserved jurisdiction |
| Effect of intervening change in Second Circuit precedent (Ganias) on district court’s order | Plaintiffs relied on Ganias panel decision supporting return | Government relied on vacatur/en banc consideration to challenge reliance | Panel noted Ganias panel was vacated en banc; remanded for district court to consider changed circumstances |
| Whether appellate jurisdiction exists over the appeal while criminal case and related orders continue | Plaintiffs sought appellate resolution | Government contended jurisdictional issues complicated immediate review | Panel need not resolve jurisdictional issues now; retained jurisdiction for expedited review if district court acts on remand |
| Whether civil and criminal matters should be coordinated | Plaintiffs favored return of non-criminal materials; suggested coordination | Government raised chain-of-custody and criminal-case retention concerns | Panel suggested district court consider having both civil and criminal cases heard by one judge to resolve conflicting orders |
Key Cases Cited
- United States v. Ganias, 824 F.3d 199 (2d Cir. 2016) (en banc decision vacating earlier panel ruling relied upon by the district court)
- United States v. Ganias, 755 F.3d 125 (2d Cir. 2014) (earlier panel decision addressing retention of electronically stored information)
- United States v. Carpenter, 190 F. Supp. 3d 260 (D. Conn. 2016) (criminal conviction and district-court proceedings related to seized materials)
- United States v. Jacobson, 15 F.3d 19 (2d Cir. 1994) (procedure for restoring appellate jurisdiction after remand and expedited review)