IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

UNITED STATES OF AMERICA, )

)

Plaintiff, )

)

v. ) Case No. 11 C 7803

)

FUNDS IN THE AMOUNT OF )

$574,840, et al., )

)

Defendants. )

____________________________________)

)

STEPHEN UNSWORTH and )

RACHEL PILLSBURY, )

)

Claimants. )

MEMORANDUM OPINION AND ORDER

This action, launched by the United States' Verified Complaint for Forfeiture of five

items of property -- funds in the amounts of $574,840, $63,184, $2,000, $856 and $21,100 -- has

been at an impasse for months, ever since claimants Stephen Unsworth ("Unsworth") and Rachel

Pillsbury ("Pillsbury") weighed in with their respective conclusory claims of possessory interest

or ownership interest or both. When the government then promptly responded with a motion

(Dkt. 14) to strike those claims (1) because of their asserted noncompliance with the

Supplemental Rules to the Federal Rules of Civil Procedure and (2) because of the claimants' 1

asserted failure to establish their requisite Article III standing, both claimants retorted with a joint

 Rule G of those Supplemental Rules deals with in rem civil forfeiture actions and is 1

cited here simply as "Rule G --."

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motion of their own and a supporting memorandum of law (together Dkt. 21), seeking a stay of

these proceedings pursuant to 18 U.S.C. § 981(g)(2) ("Section 981(g)(2)"), a motion triggered by

the claimants' concerns as to criminal prosecutions brought against them in the Circuit Court of

Cook County.

Since that time the parties have been embroiled in disputes that have effectively blocked

this action from going forward. Both sides have urged their respective positions vigorously, with

the intransigence of Unsworth's counsel (who has also served as lead counsel in actions taken

jointly by the two claimants) having been the principal roadblock standing in the way of this

Court's desire to resolve the Article III standing issue.

This Court has always been solicitous of the rights of litigants who are concerned lest

their disclosures in civil litigation may rise up to prejudice then in criminal proceedings, either

pending or impending. Thus, for example, it has slowed up the entire discovery process in 42

U.S.C. § 1983 lawsuits against certain police officers (those who have either been indicted or are

the subject of criminal investigation) by adopting the device of staying the depositions of those

officers. Such stays enable the officers to avoid their having to call upon the Fifth Amendment

privilege against self-incrimination, a step that would give rise to adverse inferences in the civil

action under the authority of Baxter v. Palmigiano, 425 U.S. 308 (1976).

Just so here. Attached to this memorandum opinion and order are this Court's oral

statement of February 24, 2012 dealing with the subject (Ex. 1) and the March 14, 2012

protective order (Ex. 2) that was then issued (Dkt. 30). Unfortunately defense counsel then

elected to frustrate the constructive purpose sought to be served by the entry of that order --

counsel provided largely nonconstructive nonresponses to the Special Interrogatories that were

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propounded by the government under the mantle of insulation that the protective order sought to

provide for the claimants. Thus, as the government has pointed out, the lead defense counsel (a

California lawyer) advanced the same arguments in response to the government's Special

Interrogatory 6 that he had recently urged unsuccessfully before the Ninth Circuit in another civil

forfeiture action, United States v. $133,420 in United States Currency, 672 F.3d 629 (9th Cir.

2012) -- and he has provided much the same type of stonewalling in dealing with Special

Interrogatories 3, 4, 5, 8 and 9.

What has ensued has been a series of skirmishes marked by the government's motion to

compel answers to those Special Interrogatories (Dkt. 34), followed by claimants' response to

that motion, coupled with a renewed motion to stay this action pursuant to Section 981(g)(2)

(Dkt. 37), and most recently by the government's renewed motion to strike claimants' claims

(Dkt. 45) and then, late last month, by claimants' supplemental brief reasserting their legal

position (Dkt. 48), this time coupled with their joint motion to suppress or quash the

government's acquisition of the funds at issue here (Dkt. 49). All of this has stalemated the

litigation.

For months the claimants here have been in a position much akin to that of the contemnor

who, having been placed in custody to induce his compliance with a performable court order that

he has refused to honor, is metaphorically said to have the keys to his cell in his own pocket. 

With existing caselaw far from clear as to whether a claimant in a civil forfeiture proceeding

under the circumstances of this case can establish the requisite Article III standing by his or her

ipse dixit, and with this Court having the threshold obligation to make that finding before going

on to the merits, it proposed to -- and did -- enter a protective order (as authorized by Section

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981(g)(3)) to protect claimants' other vital interests even while they provided, under seal, the

factual input that would enable this Court to rule on an informed basis.

As already discussed, that protective order was entered in March of this year. But

claimants' counsel have stubbornly refused to respond to the government's Special Interrogatories

(interrogatories authorized by Rule G(6)(a)), seeking to justify that refusal in material part by the

same arguments that the same California lawyer had advanced and that were found wanting by

the Ninth Circuit earlier this year. Patience has its limits -- resolution of the parties' impasse is

past due.

This Court regrets the turn that matters have taken, especially given its efforts to protect

the interest of the claimants while dealing with this forfeiture action. That level of regret extends

to the claimants' most recent merits-related filing (Dkt. 49), as to which this Court expresses no

substantive views because claimants' conduct has frustrated resolution of the Article III standing

issue that must precede merits-related considerations. 

Conclusion

In sum, the government has been within its rights in posing its Special Interrogatories

under Rule G(6) and in seeking to strike the claimants' filings under Rule G(8)(c). At this point

this Court breaks the existing logjam (1) by granting the government's motions (Dkts. 14 and 45)

to strike the Unsworth and Pillsbury claims and (2) by denying the claimants' last-referred-to

motion (Dkt. 49), except the portion of that motion that seeks leave for its filing under seal, 

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which is granted. Finally, a status hearing date is set for 8:45 a.m. September 12, 2012 to discuss

what further proceedings are appropriate.

__________________________________________

Milton I. Shadur

Senior United States District Judge

Date: August 30, 2012

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