United States v. 8 Gilcrease Lane, Quincy, Florida 32351
638 F.3d 297
D.C. Cir.2011Background
- Federal agents seized about $80 million of AdSurfDaily funds in 2008 for wire fraud and money laundering; civil forfeiture in rem against funds and two properties was filed under 18 U.S.C. § 981(a)(1)(C) and § 981(a)(1)(A).
- Claimants Bowdoin, AdSurfDaily, and Bowdoin/Harris Enterprises filed verified claims to the seized assets; district court denied pretrial release and denied dismissal of the forfeiture action after an evidentiary hearing.
- On January 13, 2009, claimants moved to withdraw their claims consenting to forfeiture; district court granted withdrawal, later, claimants sought reinstatement starting February 2009.
- Claimants’ Rule 60(b) motions sought relief to reinstate withdrawn claims; district court found withdrawal was free and deliberate and denied relief.
- Government moved for default judgment after no claimants contested forfeiture; court issued default judgment and final order of forfeiture on January 4, 2010.
- Appellants appealed to the D.C. Circuit, challenging due process and the denial of reinstatement; court affirmed the district court’s rulings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a stay was constitutionally required during parallel criminal proceedings | AdSurfDaily argued due process required a stay pending unsealing of sealed materials. | Government contends no automatic stay duty and no authority requiring stay. | No due process or constitutional duty to stay; no error in declining stay. |
| Whether the district court abused its discretion by denying reinstatement of withdrawn claims | Bowdoin argues withdrawal was induced by negligent counsel and should be reinstateable. | Government and district court found withdrawal free and deliberate; counsel's negligence not a basis to rescind. | No abuse; withdrawal was free and deliberate, Rule 60(b) motion properly denied. |
| Whether entry of default judgment was appropriate and timely after withdrawal | Appellants claim lack of notice and procedural flaws rendered default judgment invalid. | Appellants were no longer parties with withdrawn claims; notice concerns not applicable to post-withdrawal defendants. | Default judgment timely and appropriate; moot issue of interlocutory appeal. |
Key Cases Cited
- Ackermann v. United States, 343 U.S. 193 (1950) (Rule 60(b) not for freeing litigants from strategic choices)
- SEC v. Dresser Indus., Inc., 628 F.2d 1368 (D.C. Cir. 1980) (Constitution does not ordinarily require stay of civil proceedings pending criminal actions)
- Good Luck Nursing Home, Inc. v. Harris, 636 F.2d 572 (D.C. Cir. 1980) (Rule 60(b) not to rescue litigants from improvident choices)
- Kramer v. Gates, 481 F.3d 788 (D.C. Cir. 2007) (Rule 60(b) not for strategic miscalculations)
- In re Sealed Case (Bowles), 624 F.3d 482 (D.C. Cir. 2010) ( Rule 60(b) limitations in complex post-judgment matters)