United States v. $70,670.00 in U.S. Currency
929 F.3d 1293
11th Cir.2019Background
- The United States filed an in rem civil forfeiture action against cashier’s checks and cash seized from Wilson Colorado, Miladis Salgado, and Kurvas Secret as proceeds of criminal activity.
- Colorado and Kurvas Secret claimed ownership of the checks and most cash; Salgado claimed some cash and a possessory interest in other funds.
- In a parallel Florida in personam suit, victim AnnChery obtained a default judgment and a permanent injunction against Colorado and Kurvas Secret, then received assignment/transfer of the debtors’ interests in the seized funds to satisfy the judgment.
- The government moved to dismiss the federal forfeiture complaint without prejudice, arguing the state judgment made the federal action’s outcome effectively irrelevant; the district court granted dismissal without prejudice and administratively closed the case.
- Claimants sought dismissal with prejudice and sought attorney’s fees under the Civil Asset Forfeiture Reform Act (28 U.S.C. § 2465(b)(1)), arguing they had substantially prevailed; the district court denied both requests.
- The Eleventh Circuit affirmed: no abuse of discretion in allowing dismissal without prejudice and no entitlement to attorney’s fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court abused discretion permitting voluntary dismissal without prejudice rather than dismissing with prejudice | Dismissal without prejudice is unfair and would cause legal prejudice (loss of fee remedy); litigation had progressed so dismissal should be with prejudice | Dismissal without prejudice appropriate because parallel state judgment made federal contest practically moot; no bad faith or clear legal prejudice to claimants | Affirmed: dismissal without prejudice was within district court’s discretion; claimants failed to show clear legal prejudice |
| Whether claimants substantially prevailed under 28 U.S.C. § 2465(b)(1) and thus are entitled to attorney’s fees | Claimants argued they substantially prevailed because the government did not secure forfeiture and the case closed | Government argued dismissal without prejudice leaves parties as if suit never occurred; no judicial imprimatur of victory for claimants | Affirmed: dismissal without prejudice does not make claimants prevailing parties; no entitlement to fees |
| Whether loss of potential fee recovery constitutes "clear legal prejudice" preventing voluntary dismissal | Claimants: loss of fee claim is sufficient legal prejudice to require dismissal with prejudice | Government: fee risk is speculative; claimants did not show they would have prevailed on merits | Court: even assuming fee-loss could be prejudice, claimants did not show they would have substantially prevailed on the merits, so no clear legal prejudice |
| Whether district court could condition dismissal on payment of claimants’ fees (Rule 41(a)(2)) given sovereign immunity | Claimants: court may impose fee payment as condition under Rule 41(a)(2) | Government: sovereign immunity bars imposing attorney’s fees unless unequivocal waiver; Rule 41 is not such a waiver | Affirmed: court lacked authority to impose attorney’s fees on the United States as a Rule 41 condition absent an unequivocal waiver of sovereign immunity |
Key Cases Cited
- McCants v. Ford Motor Co., 781 F.2d 855 (11th Cir. 1986) (voluntary dismissal without prejudice should be denied only when defendant will suffer clear legal prejudice)
- Pontenberg v. Boston Sci. Corp., 252 F.3d 1253 (11th Cir. 2001) (delay alone, absent bad faith, insufficient to warrant dismissal with prejudice)
- Durham v. Fla. E. Coast Ry. Co., 385 F.2d 366 (5th Cir. 1967) (dismissal with prejudice is a severe sanction reserved for clear record of delay or contumacious conduct)
- United States v. Certain Real & Pers. Prop. Belonging to Hayes, 943 F.2d 1292 (11th Cir. 1991) (in rem forfeiture determines government’s title to property as against the whole world)
- CRST Van Expedited, Inc. v. Equal Emp’t Opportunity Comm’n, 136 S. Ct. 1642 (U.S. 2016) (prevailing-party inquiry requires judicial imprimatur on the change in legal relationship)
- Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Res., 532 U.S. 598 (2001) (voluntary change in conduct lacks judicial imprimatur for prevailing-party status)
- Ardestani v. Immigration & Naturalization Serv., 502 U.S. 129 (1991) (waiver of sovereign immunity must be unequivocal)
- U.S. Dep’t of Energy v. Ohio, 503 U.S. 607 (1992) (any waiver of federal sovereign immunity must be unequivocal)