United States v. Funds in the Amount of $574,840, 2013 U.S. App. LEXIS 11760

Companion case to United States v. $196,969, involving procedures in civil asset forfeiture under 18 U.S.C. §§ 981 et seq. and Supplemental Rule G.
Government filed a federal forfeiture action against five cash stashes seized from Stephen Unsworth and Rachel Pillsbury, suspects in drug trafficking; they were prosecuted in Illinois state court, whose case collapsed due to illegally obtained evidence and suppression.
Claimants filed Rule G(5)(a)(i) statements identifying themselves and their interest; accompanying each claim was a motion to stay the forfeiture pending the state case.
District court denied the stay, instead imposing nine special interrogatories to verify standing; a protective order limited disclosures of answers to the government.
The government struck the claims for lack of standing and forfeiture was ordered; judge treated standing as a merits issue rather than a jurisdictional objection.
This court reverses the forfeiture judgment and remands to resolve the claimants’ interest, noting the stay should have been granted and the protective order improperly hamstrung discovery.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the district court erred in denying a stay under 18 U.S.C. § 981(g)(2).	Unsworth/Pillsbury argued standing sufficed; stay appropriate pending state proceedings.	United States contends no stay was required due to procedural posture and need to pursue forfeiture.	Remanded; stay should have been granted pending state proceeding.
Whether the district court properly struck the claims for lack of standing under Rule G.	Claims alleged ownership/interest; standing alleged under Rule G(5)(a)(i).	Court could strike if claimant cannot establish standing by preponderance of the evidence.	Judgment reversed; standing determination not properly resolved at strike stage.
Whether the protective order improperly limited discovery to the government and hampered the claimants’ ability to contest standing.	Protective order stifled claimants’ discovery; prejudicial to resolving ownership rights.	Protective order necessary to protect information during ongoing proceedings.	Protective order improper; remand for proper consideration of discovery with stay in place.
Whether the court properly treated Article III standing as a merits issue or as a jurisdictional prerequisite.	Standing is a jurisdictional baseline to plead; merits follow thereafter.	Standing can be determined on the merits or through a Rule G strike.	Standing should be addressed on a merits-related footing, not prematurely at strike stage.

United States v. $133,420.00 in U.S. Currency, 672 F.3d 629 (9th Cir. 2012) (standing burden and government proof shifting to claimant)
United States v. $92,203.00 in U.S. Currency, 537 F.3d 504 (5th Cir. 2008) (government burden in forfeiture proceedings)
Okoro v. Bohman, 164 F.3d 1059 (7th Cir. 1999) (jurisdictional dismissal and res judicata considerations)
Hill v. Potter, 352 F.3d 1142 (7th Cir. 2003) (preclusive effect of standing determinations)
In re African-American Slave Descendants Litigation, 471 F.3d 754 (7th Cir. 2006) (standing and merits considerations in complex actions)
Frederiksen v. City of Lockport, 384 F.3d 437 (7th Cir. 2004) (standing and jurisdictional issues in municipal actions)
On Leong Chinese Merchants Ass’n Building, 918 F.2d 1289 (7th Cir. 1990) (forfeiture interplay and property ownership)
United States v. Funds in Amount of Thirty Thousand Six Hundred Seventy Dollars, 403 F.3d 448 (7th Cir. 2005) (government burden to establish forfeiture by preponderance)
United States v. $487,825.000 in U.S. Currency, 484 F.3d 662 (3d Cir. 2007) (standing and proof shifting in forfeiture)