United States v. Contents of Accounts
629 F.3d 601
6th Cir.2011Background
- Chavez, Inc. sold cigarettes interstate without Jenkins Act reporting, warnings to customers that taxes would not be reported.
- Chavez, Inc. admitted Jenkins Act reporting requirements and never filed any Jenkins Act reports with any state.
- The government conducted search/seizure warrants in December 2009, seizing Chavez, Inc. assets and related accounts.
- In April 2010, the government filed a civil forfeiture action under 18 U.S.C. § 981(a)(1)(C) alleging specified unlawful activity.
- Defendants moved to dismiss or for a preliminary injunction; the district court denied both motions and later vacated interim relief.
- The district court held that Rule 65 injunctive relief is inconsistent with CAFRA’s § 983(f) and thus not available to forfeiture claimants; an evidentiary hearing was ordered on forfeiture basis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Rule 65 relief is available in civil forfeiture. | Government contends § 983(f) precludes Rule 65 relief as inconsistent. | Chavez argues Rule 65 is available and applicable to forfeiture proceedings. | Rule 65 relief is unavailable; § 983(f) is inconsistent with Rule 65. |
| Whether Jenkins Act violation can support mail fraud liability in this context. | Government asserts failure to file Jenkins Act reports aids mail fraud scheme. | Defendants contend Jenkins Act violation alone does not establish mail fraud or CCTA liability. | Issue not reached on the merits; appellate jurisdiction did not permit ruling on dismissal. |
Key Cases Cited
- Pasquantino v. United States, 544 U.S. 349 (2005) (tax-related fraud concepts relevant to property interest in government revenue)
- Jones v. City of Monroe, 341 F.3d 474 (6th Cir.2003) (four-factor test for preliminary injunctions; factors are balances, not prerequisites)
- Chambers v. Ohio Dep't of Human Servs., 145 F.3d 793 (6th Cir.1998) (definition of pendent appellate jurisdiction applicability)
- Wedgewood Ltd. P'ship I v. Twp. of Liberty, 610 F.3d 340 (6th Cir.2010) (pendency of appellate review of intertwined issues)
- O'Bryan v. Holy See, 556 F.3d 361 (6th Cir.2009) (explanation of pendent appellate jurisdiction limits)
- U.S. v. Melrose East Subdivision, 357 F.3d 493 (5th Cir.2004) (due process considerations in civil forfeiture context)
- U.S. v. Daniel, 329 F.3d 480 (6th Cir.2003) (joint analysis of mail and wire fraud statutes)