In re 650 Fifth Ave. & Related Props.
934 F.3d 147
2d Cir.2019Background
- Alavi Foundation and 650 Fifth Avenue Co. (Claimants) owned a Manhattan skyscraper and were sued in a civil forfeiture action alleging violations of IEEPA and money‑laundering; Government sought forfeiture based on alleged ties to Iran and Bank Melli.
- In 2008–09 the FBI executed a December 19, 2008 search of offices at 500 Fifth Avenue pursuant to a warrant the Second Circuit later found facially deficient for lack of particularity and failure to incorporate the supporting affidavit. Over 200 boxes and computers were seized.
- The Government amended its forfeiture complaint in 2009 to add the Claimants; much of the amended complaint relied on material obtained in the 2008 search.
- On initial district‑court review the Government won summary judgment; the Second Circuit vacated in 2016 and remanded, instructing the court to allow the Claimants to litigate a statute‑of‑limitations defense and to reconsider suppression issues.
- On remand the district court denied the Claimants’ motion to compel discovery on timeliness, denied suppression (applying good‑faith and inevitable‑discovery exceptions), excluded two former board members from testifying, admitted videotaped Fifth Amendment invocations, and barred certain rebuttal evidence; the jury found for the Government and forfeiture was ordered.
- The Second Circuit reversed or vacated multiple rulings: ordered discovery on the statute‑of‑limitations issue, rejected Government reliance on the good‑faith exception to preserve seized evidence, vacated the inevitable‑discovery ruling for inadequate findings, and reversed several evidentiary rulings regarding witnesses and videotaped invocations; judgment vacated and case remanded.
Issues
| Issue | Plaintiff's Argument (Claimants) | Defendant's Argument (Government) | Held |
|---|---|---|---|
| Discovery on statute of limitations (19 U.S.C. §1621) | The court must permit targeted discovery to show when the Government discovered the offenses; prior denials left the record undeveloped. | Discovery was waived because Claimants did not specifically request limited categories during the original discovery period and requests were overbroad. | Reversed: district court abused discretion by denying discovery; vacated summary judgment on timeliness and remanded for discovery. |
| Suppression — Good‑faith exception to exclusionary rule | The warrant was facially defective and Government conduct was grossly negligent; good‑faith exception does not apply. | Officers reasonably relied on a magistrate‑issued warrant; exclusion unnecessary under Leon/Davis. | Reversed: good‑faith exception unavailable because the warrant was so facially deficient and Government review was grossly negligent. |
| Suppression — Inevitable‑discovery exception | Government cannot meet the strict, item‑by‑item, historically demonstrated showing required to prove inevitable discovery of each seized item. | The investigation was active, subpoenas/protective orders and civil discovery would have yielded the materials. | Vacated: district court failed to apply the Circuit’s two‑step, particularized inevitable‑discovery standard; remanded for detailed factual findings linking each seized item to an inevitable lawful source. |
| Witnesses, videotaped Fifth Amendment invocations, and rebuttal evidence | Claimants should be allowed to call former board members who previously invoked the Fifth Amendment, to rebut Government intimidation theory, and to exclude or limit inflammatory videotapes. | Government may present Fifth Amendment invocations as probative evidence; court should exclude late testimony and limit rebuttal as irrelevant or prejudicial. | Mixed: Court abused discretion in barring two witnesses and in permitting the Government’s dramatic videotape presentation and in excluding rebuttal. Government may prove invocation factually at retrial, but videotape form must be limited and Claimants may present rebuttal evidence; preclusion of the two witnesses reversed. |
Key Cases Cited
- Leon v. United States, 468 U.S. 897 (good‑faith exception to exclusionary rule)
- Davis v. United States, 564 U.S. 229 (application and limits of good‑faith doctrine)
- Herring v. United States, 555 U.S. 135 (exclusionary rule deterrence and costs)
- In re 650 Fifth Ave. & Related Props., 830 F.3d 66 (prior Second Circuit opinion directing remand and standards governing suppression and inevitable discovery)
- United States v. Eng, 971 F.2d 854 (Second Circuit formulation of inevitable‑discovery proof requirements)
- United States v. Vilar, 729 F.3d 62 (burden and specificity for inevitable discovery)
- United States v. Clark, 638 F.3d 89 (circumstances where reliance on warrant is unreasonable)
- Brink’s, Inc. v. City of New York, 717 F.2d 700 (admissibility and adverse inference from Fifth Amendment invocations in civil trials)
- United States v. Certain Real Prop. Known as 4003‑4005 5th Ave., 55 F.3d 78 (standards for permitting withdrawal of Fifth Amendment invocation and allowing testimony)