Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_10-cv-00004/USCOURTS-azd-2_10-cv-00004-0/pdf.json

Nature of Suit Code: 625
Nature of Suit: Drug Related Seizure of Property
Cause of Action: 21:881 Forfeiture Property-Drugs

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

United States of America, 

Plaintiff, 

vs.

2007 Custom Motorcycle; VIN:

1R9SM29627I423003, 

Defendant. 

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No. CV-10-00004-PHX-FJM

ORDER

The court has before it claimant Indy Route 66 Cycles, Inc.’s motion to dismiss (doc.

10), the United States’ response (doc. 11), and claimant’s reply (doc. 13).

I

The government alleges that defendant, a 2007 custom motorcycle, is subject to civil

forfeiture because it constitutes proceeds of drug trafficking under 21 U.S.C. § 881(a)(6) and

property involved in a money laundering transaction under 18 U.S.C. § 981(a)(1)(A).

According to the government, the motorcycle belongs to Timothy Allen. From about 2007

until his arrest in April 2009, Allen allegedly made regular trips to the Phoenix, Arizona area

to purchase and repackage large amounts of marijuana for transport to Indiana. In October

2009, he pled guilty in this court to possession of, and conspiracy to possess, 100 kilograms

or more of marijuana with the intent to distribute in violation of 21 U.S.C. §§ 841(a)(1), 846.

He also pled guilty to making a false statement to the government concerning the real estate

he owned, in violation of 18 U.S.C. § 1001. Allen allegedly used the proceeds from drug

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trafficking to purchase motorcycles, businesses, and real estate in Arizona and Indiana,

including the motorcycle in question.

In May 2009, the government found the motorcycle in the garage of an Indiana home

owned by Allen’s sister, Tena Allen. During an interview, Tena allegedly said that the

motorcycle belonged to Allen. According to the government, she said that Allen would buy

empty lots and homes and transfer them to her business, T.A.K.E. 3 Investments, LLC,

without any payment in return. Records show that Allen transferred about thirteen properties

to the business in October 2006. The properties were allegedly remodeled and sold, with

Tena and Allen splitting the profits. Tena and Allen also apparently co-owned businesses

named Cars 4 U Auto Sales, LLC and Reptile Cycles Rebuild, LLC. Tena allegedly said that

Allen worked as a contractor, but she did not know where his money came from, and she was

not sure what types of jobs he was doing. When the government seized two motorcycles

from Tena’s garage, including the one in question, she allegedly said that she knew nothing

about them.

Claimant, an Indianapolis motorcycle business, asserts ownership of the motorcycle.

It apparently built the motorcycle for Allen in April 2007. According to the government,

claimant’s vice president, Vince Ballard, told investigators in May 2009 that Allen always

paid in cash and still owed $5,000.00 on the motorcycle. When Ballard was asked if he knew

what Allen did for a living, he allegedly said that he had his suspicions Allen was involved

in drug trafficking. In June 2009, claimant filed a private mechanic’s lien on the motorcycle

for $20,000.00. In July 2009, Allen wrote the government a letter disclaiming ownership of

the motorcycle and asserting that it belonged to claimant. The motorcycle is currently in the

custody of the United States Marshals Service in Indianapolis. It is allegedly worth around

$30,000.00, down from $85,000.00 several years ago.

Claimant moves to dismiss for failure to state a claim pursuant to Rule 12(b)(6), Fed.

R. Civ. P. It also challenges venue in the District of Arizona and contends that the Southern

District of Indiana would be a more convenient forum.

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1

 The government’s claims are somewhat broader. The statute reaches property

involved in completed or attempted transactions in violation of money laundering statutes,

18 U.S.C. §§ 1956-1957, as well as property traceable to such property. 18 U.S.C.

§ 981(a)(1)(A). In addition, the government invokes 18 U.S.C. § 981(a)(1)(C), which, in

relevant part, reaches property derived from proceeds traceable to a conspiracy to commit

a money laundering violation. Id. § 981(a)(1)(C) (incorporating offenses listed in 18 U.S.C.

§ 1956(c)(7), which includes offenses listed in 18 U.S.C. § 1961(1), which includes

violations of 18 U.S.C. §§ 1956-1957).

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II

Civil in rem forfeiture actions arising from a federal statute are governed by the

Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions of the

Federal Rules of Civil Procedure. Rule G(1), Fed. R. Civ. P. Supp. R. The pleading

requirements are set out in Rule G(2), Fed. R. Civ. P. Supp. R. A complaint must “state

sufficiently detailed facts to support a reasonable belief that the government will be able to

meet its burden of proof at trial.” Rule G(2)(f), Fed. R. Civ. P. Supp. R. Pursuant to the

Civil Asset Forfeiture Reform Act of 2000 (“CAFRA”), 18 U.S.C. § 983, the burden of proof

at trial “is on the Government to establish, by a preponderance of the evidence, that the

property is subject to forfeiture.” 18 U.S.C. § 983(c)(1). Thus, the complaint must contain

enough detailed facts to support a reasonable belief that the government will be able to show

that the motorcycle constitutes proceeds traceable to an illegal drug transaction, 21 U.S.C.

§ 881(a)(6), and, in relevant part, was involved in an illegal money laundering transaction,

18 U.S.C. § 981(a)(1)(A).1

 Because the government’s theory of forfeiture is that the

motorcycle was involved in the commission of an offense, the complaint must also support

a reasonable belief that the government will be able to show that there was a “substantial

connection between the property and the offense.” Id. § 983(c)(3).

Claimant contends that the government fails to state a claim because it neither alleges

that Allen trafficked in motorcycles nor demonstrates that he paid for the motorcycle. When

ruling on a Rule 12(b)(6) motion, which a claimant may bring under Rule G(8)(b), Fed. R.

Civ. P. Supp. R., we must accept well-pled facts as true and draw reasonable inferences in

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favor of the non-moving party. Ashcroft v. Iqbal, __ U.S. __, __, 129 S. Ct. 1937, 1949

(2009). The government provides a detailed account of a convicted drug trafficker, Allen,

who converted significant assets into business profits with the help of his sister, who says

that the motorcycle belongs to him. She also says that they co-owned a motorcycle business.

Moreover, a claimant executive acknowledged that Allen always paid in cash and still owes

$5,000.00 on the motorcycle, which was worth considerably more than that amount when it

was built. Taken as true, the government’s factual allegations support a reasonable belief

that it will be able to prevail on the merits. Therefore, we deny claimant’s motion to dismiss

based on a failure to state a claim.

We note that claimant raises concerns with the government’s ability to show that it

had probable cause to institute this forfeiture action. The forfeiture statutes relied on by the

government incorporate a customs law, 19 U.S.C. § 1615, which requires the government to

show probable cause to institute a forfeiture action before the burden of proof shifts to a

claimant. See 18 U.S.C. § 981(d) (incorporating consistent customs laws); 21 U.S.C.

§ 881(d) (same). Where CAFRA applies, as here, it replaces the burden of proof under 19

U.S.C. § 1615 with a preponderance of the evidence standard based on evidence gathered

either before or after the filing of a complaint. See 18 U.S.C. § 983(c)(2). CAFRA does not,

however, affect the government’s requirement to show probable cause to institute a forfeiture

action under 19 U.S.C. § 1615, as incorporated. United States v. $493,850.00 in U.S.

Currency, 518 F.3d 1159, 1166-69 (9th Cir. 2008). Although the probable cause requirement

focuses on the institution of a forfeiture action, it is an evidentiary burden and not a pleading

requirement. See Rule G(8)(b)(ii), Fed. R. Civ. P. Supp. R. (“The sufficiency of the

complaint is governed by Rule G(2).”); Rule G(8)(b)(ii), Fed. R. Civ. P. Supp. R. advisory

committee’s note (“The adequacy of the complaint is measured against the pleading

requirements of subdivision (2), not against the quality of the evidence available to the

government when the complaint was filed.”). Thus, claimant must raise its concerns that go

beyond the requirements of Rule G(2), Fed. R. Civ. P. Supp. R., in a motion for summary

judgment or at trial.

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III

Next, claimant contends that venue is improper in the District of Arizona. Under 28

U.S.C. § 1355:

(b)(1) A forfeiture action or proceeding may be brought in – 

(A) the district court for the district in which any of the acts or omissions

giving rise to the forfeiture occurred, or 

(B) any other district where venue for the forfeiture action or proceeding is

specifically provided for in section 1395 of this title or any other statute.

***

(d) Any court with jurisdiction over a forfeiture action pursuant to subsection

(b) may issue and cause to be served in any other district such process as may

be required to bring before the court the property that is the subject of the

forfeiture action.

28 U.S.C. § 1355(b)(1), (d). The government maintains that venue is proper in this district

because Allen’s regular purchasing and repackaging of marijuana in Arizona for transport

to Indiana constitute acts giving rise to the forfeiture. Aside from evidentiary contentions

already rejected, claimant argues that § 1355(b) confers jurisdiction but not venue.

When Congress amended § 1355 to add the above provisions in 1992, it referred to

a court having jurisdiction “pursuant to subsection (b)” in § 1355(d), suggesting that

§ 1355(b) is a jurisdictional grant. Contents of Account No. 03001288 v. United States, 344

F.3d 399, 403 (3d Cir. 2003) (holding that § 1355(b) confers in rem jurisdiction and not

merely venue). Indeed, the Ninth Circuit recently held that § 1355(b) confers in rem

jurisdiction. United States v. Approximately $1.67 Million, 513 F.3d 991, 998 (9th Cir.

2008) (agreeing with the analysis of the Third Circuit without mentioning venue). In

§ 1355(b), Congress used the “may be brought in” language of venue. United States v.

$633,021.67 in U.S. Currency, 842 F. Supp. 528, 534 (N.D. Ga. 1993) (holding that

§ 1355(b) confers both in rem jurisdiction and venue). Thus, the plain language of the statute

supports the government’s interpretation that it confers venue in addition to in rem

jurisdiction. On the other hand, were claimant’s contention that it does not address venue

correct, § 1355(b)(1)(B) would grant jurisdiction in any district where venue lies and

§ 1355(b)(1)(A) would grant jurisdiction in additional districts where venue does not. Such

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a regime would make little sense. We conclude that § 1355(b) confers venue, which is

otherwise proper in this district because acts giving rise to the forfeiture, as alleged, occurred

here. Thus, we deny claimant’s motion to dismiss based on improper venue.

IV

Claimant also moves to dismiss on the grounds that the Southern District of Indiana

would be more a convenient forum. Claimant invokes the doctrine of forum non conveniens.

In federal courts, the doctrine applies “only in cases where the alternative forum is abroad,

and perhaps in rare instances” involving state or territorial courts. Sinochem Int’l Co. v.

Malaysia Int’l Shipping Corp., 549 U.S. 422, 430, 127 S. Ct. 1184, 1190 (2007) (citation

omitted). Where the alternative forum is another federal court, the proper inquiry is under

28 U.S.C. § 1404(a), which states, “For the convenience of parties and witnesses, in the

interest of justice, a district court may transfer any civil action to any other district or division

where it might have been brought.” Although the question is one of transfer and not of

dismissal, the relevant factors are similar to the doctrine of forum non conveniens. They

include the plaintiff’s choice of forum, the parties’ contacts with the forum, the location

where any relevant agreements were made, the forum most familiar with the governing law,

the ease of access to sources of proof, the availability of compulsory process to compel

attendance of unwilling non-party witnesses, and the relative costs of litigation in the two

forums. Jones v. GNC Franchising, 211 F.3d 495, 498-99 (9th Cir. 2000). The moving party

bears the burden of making “a strong showing of inconvenience to warrant upsetting the

plaintiff’s choice of forum.” Decker Coal Co. v. Commonwealth Edison Co., 805 F.2d 834,

843, (9th Cir. 1986). Moreover, transfer is inappropriate where it would merely shift the

inconvenience to another party. See id.

Claimant asserts that the Southern District of Indiana would be more convenient

because the motorcycle, claimant, claimant’s witnesses, and claimant’s counsel are located

in Indiana. It also asserts that attending proceedings in Arizona would be so expensive and

onerous that it would be denied a meaningful opportunity to contest the forfeiture. While the

government concedes that the Southern District of Indiana is an adequate alternative forum,

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it contends that its choice of forum should be respected. It says that its witnesses, two agents,

are based in Arizona and its counsel, including the two lawyers who prosecuted Allen, would

continue to be responsible for this action if it were transferred. The government also says

that the evidence linking Allen’s drug trafficking activities to the motorcycle is in Arizona,

and it points out that claimant fails to identify its witnesses, their willingness to testify, or the

importance of their testimony. In reply, claimant identifies two claimant executives, Tena

Allen, and Indiana Bureau of Motor Vehicle officials as witnesses.

Claimant fails to make a strong showing of inconvenience. Both forums are

inconvenient to one of the parties and its witnesses. Transfer would merely shift the

inconvenience to the government and disturb its choice of forum. Arizona also has an

interest in combating the consequences of local drug trafficking with coordinated resources.

Although claimant does not provide any indication of the importance of its witnesses, we

note that it is unlikely that the testimony of motor vehicle department officials would be

necessary should claimant wish to admit motor vehicle records. We also note that claimant

identifies Tena as a witness while emphasizing her alleged statement that she did not know

anything about the motorcycle, which suggests that it primarily intends to impeach any

testimony she might offer. Of course, if she does not testify, claimant need not impeach her

testimony. Finally, claimant’s counsel is advised that he may request to appear

telephonically at any pre-trial proceedings. Because claimant fails to meet its burden, we

deny its motion to dismiss construed as one for change of venue under 28 U.S.C. § 1404(a).

IT IS THEREFORE ORDERED DENYING Indy Route 66 Cycles, Inc.’s motion

to dismiss (doc. 10).

DATED this 6th day of July, 2010.

Case 2:10-cv-00004-FJM Document 18 Filed 07/07/10 Page 7 of 7