UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

CASE NO. 20-80958-CV-MIDDLEBROOKS/Reinhart

ZANE BALSAM,

Plaintiff,

v.

UNITED STATES OF AMERICA,

Defendant.

_________________________________________/

ORDER ADOPTING REPORT AND RECOMMENDATION

THIS CAUSE comes before the Court on a Report and Recommendation issued by 

Magistrate Judge Bruce Reinhart (the “Report”) on January 4, 2022. (DE 60). The Report 

recommends granting the Government’s Motion to Dismiss the Amended Complaint (DE 51) and 

granting in part and denying in part Plaintiff’s Motion for Leave to Stay Amended Complaint or 

in the Alternative Dismiss Without Prejudice (DE 56). No objections have been filed and the 

deadline for Plaintiff to file them, which was extended from January 18, 2022 to February 4, 2022

at Plaintiff’s request, has now elapsed. (DE 64; DE 69). 

I. Background

Plaintiff originally filed a three-count Complaint alleging that the Government seized his 

assets in violation of a Consent to Forfeiture Agreement it entered with him. (DE 1). The 

Government moved to dismiss the Complaint, Judge Reinhart recommended dismissing the action 

because, inter alia, Plaintiff failed to properly establish this Court’s subject matter jurisdiction, 

and, over Plaintiff’s objections, I adopted Judge Reinhart’s Report and Recommendation. (DE 29; 

DE 30; DE 42). 

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Plaintiff then filed an Amended Complaint. (DE 50), which the Government has moved to 

dismiss (DE 51). Plaintiff’s Amended Complaint alleges that the Government breached its Consent 

to Forfeiture Agreement with him by fulfilling Plaintiff’s restitution obligations from assets not 

included in the Agreement. (See generally DE 50). In addition to his breach of contract claim, 

Plaintiff seeks to recover monetary damages for wrongfully seized assets under the Federal Tort 

Claims Act (“FTCA”), for the Government to return any wrongfully seized assets under Federal 

Rule of Criminal Procedure 41(g), and for a declaration that he no longer owes any restitution. 

(Id.). After the Government pointed out that Plaintiff had failed to exhaust his administrative 

remedies with respect to his FTCA claims, Plaintiff filed a Motion for Leave to Stay Amended 

Complaint or in the Alternative Dismiss Without Prejudice (DE 56) so that he could exhaust his 

administrative remedies with respect to those claims. 

On January 4, 2022, Judge Reinhart issued his Report and Recommendation 

recommending that I dismiss the Amended Complaint. (DE 60). He concluded that Plaintiff’s 

FTCA claims should be dismissed without prejudice because Plaintiff failed to exhaust his 

administrative remedies, and that all other claims should be dismissed with prejudice for failure to 

state a claim. (Id.). 

II. Discussion

Judge Reinhart recommended that I dismiss both Plaintiff’s FTCA and non-FTCA 

claims—the former without prejudice and the latter with—for lack of subject matter jurisdiction 

and for failure to state a claim, respectively. Each category of claims is addressed below. 

A. FTCA Claims

With respect to Plaintiff’s FTCA claims, Plaintiff has conceded that this Court lacks subject 

matter jurisdiction over those claims because he has not exhausted his administrative remedies. 

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(DE 56). Judge Reinhart recommends that Plaintiff’s FTCA claims therefore be dismissed without 

prejudice. Under the FTCA, “[a]n action shall not be instituted upon a claim against the United 

States . . . unless the claimant shall have first presented the claim to the appropriate Federal agency 

and his claim shall have been finally denied by the agency . . . .” 28 U.S.C. § 2675. Failure to 

exhaust administrative remedies prior to filing divests the district court of subject matter 

jurisdiction. See, e.g., McNeil v. United States, 508 U.S. 106, 111 (1993); Davis v. United States, 

272 Fed. App’x 863, 866 (11th Cir. 2008). Because “[f]ederal courts have an independent 

obligation to ensure that subject-matter jurisdiction exists before reaching the merits of a dispute,” 

I agree with Judge Reinhart’s determination that Plaintiff’s FTCA claims must be dismissed 

without prejudice. Jacobson v. Florida Sec’y of State, 974 F.3d 1236, 1245 (11th Cir. 2020). 

B. All Other Claims

As to Plaintiff’s other claims, Judge Reinhart concluded that the Amended Complaint 

failed to state a claim upon which relief can be granted because it did not allege a plausible claim 

that the Government wrongfully seized Plaintiff’s assets. (DE 60 at 5). Because Plaintiff has not 

articulated a legal theory or cited any legal authority to support his claims that the Consent to 

Forfeiture Agreement somehow limited the Government’s collection under the federal restitution 

laws, I agree with Judge Reinhart’s conclusion that the Amended Complaint should be dismissed. 

Judge Reinhart further recommended that these claims be dismissed without leave to 

amend because Plaintiff appears to misunderstand the distinction between forfeiture and 

restitution. (Id. at 8). As Judge Reinhart pointed out, “[w]hen imposing a sentence for a property 

crime, the Court ‘shall order restitution to each victim in the full amount of each victim’s losses 

as determined by the court and without consideration of the economic circumstances of the 

defendant.’ 18 U.S.C. ¶ 3663(f)(1)(A); see 18 U.S.C. 3663A(3)(b)(1). That restitution order can 

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be enforced against ‘all property or rights’ of [Plaintiff], with limited exceptions not applicable 

here. 18 U.S.C. § 3664(m)(1)(A)(i) (cross-referencing to 18 U.S.C. § 3613(a)).” Thus, the full 

amount of Plaintiff’s restitution—$50,000,000.00—can be satisfied from any assets belonging to 

Plaintiff, including those assets that were not the subject of the Consent to Forfeiture Agreement. 

Because the Government did not unlawfully seize Plaintiff’s property, Plaintiff cannot cure the 

defects in his Complaint and amendment would be futile. 

After reviewing the Report and the record, I agree with Judge Reinhart’s conclusions and 

find that his reasoning as set forth in the Report is accurate and thorough. 

Accordingly, it is hereby ORDERED AND ADJUDGED that:

(1) Magistrate Judge Reinhart’s Report and Recommendation (DE 60) is ADOPTED.

(2) The Government’s Motion to Dismiss the Amended Complaint (DE 51) is 

GRANTED. 

(3) Plaintiff’s Amended Complaint (DE 50) is DISMISSED WITHOUT PREJUDICE 

as to Plaintiff’s FTCA claims and WITH PREJUDICE as to all other claims. 

(4) Plaintiff’s Motion for Leave to Stay Amended Complaint or in the Alternative Dismiss 

Without Prejudice (DE 56) is GRANTED IN PART and DENIED IN PART. It is 

granted in that Plaintiff’s FTCA claims are dismissed without prejudice so that he can 

exhaust his administrative remedies. It is denied in all other respects.

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(5) The Clerk of Court shall CLOSE THIS CASE and DENY AS MOOT all pending 

motions.

SIGNED in Chambers in West Palm Beach, Florida, this 16th day of February, 2022.

Donald M. Middlebrooks

United States District Judge

Cc: Counsel of Record

Zane Balsam, PRO SE

53814-004

Coleman Low

C-3

Federal Correctional Institution

Inmate Mail/Parcels

Post Office Box 1031

Coleman, FL 33521

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