305 F.R.D. 20
D.D.C.2015Background
- The United States filed an in rem civil forfeiture action seeking approximately $70.99 million as proceeds of alleged wire fraud; $10.1 million was seized from Afghanistan International Bank’s (AIB) interbank account at Standard Chartered (NY).
- AIB filed a verified claim asserting interest in $4,330,287.03 (the amount it stipulated was held for Shadman-related accounts) and served discovery (interrogatories and document requests).
- The Government moved to strike AIB’s claim for lack of statutory standing under 18 U.S.C. § 981(k); that motion remains pending and will determine AIB’s continued participation.
- AIB moved to compel responses to its discovery and for more time to respond to the Motion to Strike; the Government sought a protective order staying discovery until disposition of the Motion to Strike.
- The magistrate judge limited discovery to jurisdictional issues relevant to statutory standing under § 981(k)(4)(B), ordered the Government to answer interrogatories that bear on whether AIB can qualify as an “owner” or fall within statutory exceptions, denied other interrogatories as premature or irrelevant, denied the protective order, and granted AIB’s motion to compel in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AIB is entitled to broad discovery while the Government’s Motion to Strike (statutory standing) is pending | Gov: Stay discovery because Motion to Strike may fully dispose of AIB’s claim; responding would be undue burden | AIB: Needs discovery to establish statutory standing and to oppose Motion to Strike | Limited discovery allowed: only jurisdictional discovery relevant to statutory standing; protective order denied |
| Scope of discovery relevant to standing under 18 U.S.C. § 981(k) | Gov: Standing turns on statutory definition of “owner”; many requests seek merits, not standing | AIB: Seeks information to show it is the owner or otherwise qualifies for exceptions; some discovery is necessary to brief Motion to Strike | Court: Discovery limited to matters bearing on whether AIB is an “owner” under § 981(k)(4)(B) or fits statutory exceptions |
| Whether interrogatories 1–11, 16–17 must be answered | Gov: Many are premature or go to merits / constitutional defenses; not relevant to standing | AIB: Wants answers now to prepare opposition and potential constitutional challenge | Court: Interrogatories 1–11, 16, 17 are premature or merit-based and need not be answered now |
| Whether interrogatories 12–15 and related document requests must be answered | Gov: Some may touch on allegations of wrongdoing or discharged-obligation exception but production burdensome | AIB: These interrogatories directly pertain to statutory exceptions and thus standing | Court: Interrogatories 12–15 must be answered; related broad production requests denied as redundant or premature |
Key Cases Cited
- United States v. Union Bank for Savings & Investment (Jordan), 487 F.3d 8 (1st Cir. 2007) (explains treatment of funds in foreign accounts and interbank accounts for § 981(k))
- Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1978) (broad relevance standard for discovery)
- Food Lion, Inc. v. United Food & Commercial Workers Int'l Union, 103 F.3d 1007 (4th Cir. 1997) (district court discretion in limiting discovery)
- Burka v. United States Dep’t of Health & Human Servs., 87 F.3d 508 (D.C. Cir. 1996) (factors for protective orders under Rule 26)
- Coastal States Gas Corp. v. Dep’t of Energy, 84 F.R.D. 278 (D. Del. 1979) (discovery should precede resolution of dispositive motions when relevant to those motions)
- All Assets Held at Bank Julius Baer & Co., Ltd., 959 F. Supp. 2d 81 (D.D.C. 2013) (distinguishes statutory standing from innocent-owner affirmative defense)
- Seattle Times Co. v. Rhinehart, 467 U.S. 20 (1984) (Rule 26(c) grants broad protective-order discretion)