16-4025-cv Higgins Ave., LLC v. Stathakis UNITED STATES COURT OF APPEALS FOR THE SECO ND CIRCUIT

SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DA TABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Cour t of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courth ouse, 40 Foley Square, in the City of New York, on the 17 th day of October, two thousand seventeen.

PRESENT: JOHN M. WALKER, JR., REENA RAGGI, PETER W. HALL, Circuit Judges

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---------------------------- ---------------------------- -------------- HIGGINS AVENUE, LLC, Interested Party-Appellant , UNITED STATES OF AMERICA, Plaintiff,

v. No. 16-4025-cv LARRY STATHAKIS, Defendant-Appellee , EVANGELOS GERASIMOU, GEORGIOS GERASIMOU, Defendants.

---------------------------- ---------------------------- -------------- APPEARING FOR APPELLANT: TODD C. STECKLER, Berkman, Henoch, Peterson, Peddy & Fenche l, P.C., Garden City, New York.

APPEARING FOR APPELLEE: BRIAN L. GARDNER, Cole Schotz, P.C., New York, New York.2 Appeal from an order of the United States District Court for the Eastern District of New York (Carol Bagley Amon, Judge ). UPON DUE CONSIDERATION, IT IS HEREBY ORDERE D, ADJUDGED, AND DECREED that the order entered on November 1, 2016, is AFFIRMED. Higgins Avenue, LLC (“Higgins” ) invoked the All Writs Act, see 28 U.S.C. § 1651, to move for a perman ent injunction barring criminal defendant Larry Stathakis from pursuing a state-court action seeking title to 133-01/05 Higgins Drive, Flushing, New York (the “Property”) based on the purported issue-preclusive effects of a preliminary order of forfeiture entered ag ainst Stathakis in the federal criminal proceedings. The district court concluded th at it was deprived of jurisdiction by the Anti-Injunction Act, see 28 U.S.C. § 2243, and that th e exception for relitigation of matters previously decided by a federal court was inapplicab le. On appeal pursuant to 28 U.S.C. § 1292(a)(1), Higgins faults the district court’s jurisdictional conclusion, arguing that Stathakis fully litigated his fo rfeited interest in the Property during his criminal proceedings. In reviewing the ch allenged ruling, we examine the district court’s factual findings for clear error and its interpretation of the All Writs Act and the Anti-Injunction Act de novo. See Wyly v. Weiss , 697 F.3d 131, 137 (2d Cir. 2012). Although we agree with Higgin s that the value of Stathaki s’s forfeited property interest was litigated in prior criminal proceedings, we affirm the challenged denial because the question of whether Stathakis or Higgins possessed lawful pre-forfeiture title to the3 Property was not. We assume the parties’ fa miliarity with the fact s and record of prior proceedings, which we referen ce only as necessary to expl ain our decision to affirm.

“The All Writs Act . . . au thorizes federal courts to ‘issue all writs necessary or appropriate in aid of their respective juri sdictions and agreeable to the usages and principles of law.’” Id. at 137 (quoting 28 U.S. C. § 1651(a)). “This grant of authority is limited by the Anti-Injunction Act . . . whic h bars a federal court from enjoining a proceeding in state court unless that action is ‘expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.’”

Id. (quoting 28 U.S.C. § 2283). Only th e third exception—the so -called “relitigation exception”—is relevant to this appeal. Id. This exception, “which was designed to implement well-recognized concepts of claim and issue preclusion, authorizes a federal court to enjoin state litigati on of a claim or issue that pr eviously was presented to and decided by the federal court.” Id. at 139 (internal quotation marks omitted). In applying the principle here, we follow the Su preme Court’s direction that “any doubts as to the propriety of a federal injunction agains t state court proceedings should be resolved in favor of permitting the state courts to proceed in an orderly fashion to finally determine the controversy.” Id. at 137 (internal alteration omitted) (quoting Atlantic Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs , 398 U.S. 281, 297 (1970)).4 “[T]he federal common law” of i ssue preclusion, which applies here, 1 imposes four requirements: that “(1) the identical issue was raised in a previous proceeding; (2) the issue was actually litigated and decided in the previous proceeding; (3) the parties had a full and fair opportunity to litigate the issue; and (4) th e resolution of the issue was necessary to support a valid and final judgment on the merits.” Id. at 140-41 (internal quotation marks and alteration omitted). In the context of the Anti-Injunction Act’s relitigation exception, we apply th is doctrine narrowly, as “a c ourt does not usually get to dictate to other courts the preclusion conseque nces of its own judgment,” a matter that is “usually the bailiwick of the second court—in this case, the New York state court.” Id. at 140 (internal quotation marks omitted). On appeal, Higgins and Stat hakis dispute the preclusive effect of the district court’s rulings in the criminal proceeding that (1) Stathakis’s collec tive property interests did not exceed the value of his money forfe iture judgment, and (2 ) he would forfeit any rights in the Property to the federal government. Although both of these issues were decided against Stathakis by entry of his cr iminal judgment and preliminary order of forfeiture, see App’x 338–39, 361–64 (concluding that total value of asserted property

1 Higgins’s contentions that claim preclusion principles shou ld be applied, and that Wyly v. Weiss is inapplicable, are “not sufficiently argue d in the briefs,” and, therefore, merit no further discussion. Norton v. Sam’s Club , 145 F.3d 114, 119 (2d Cir. 1998). In any event, to the extent Higgin s seeks application of the An ti-Injunction Act’s “in aid of jurisdiction” exception for prope rty over which a federal district court has control, see Wyly v. Weiss , 697 F.3d at 137–38, Higgin s raised no such argument in the district court, and the exception would not apply here becau se Higgins itself possesses the property following its removal from the final order of forfeiture.5 rights did not exceed mone y forfeiture judgment); id. at 363 (directing that Stathakis “forfeit all of his right, title and interest” in the Property), we do not understand either of

these issues to be dis puted in state court. The narrow issue presented in the stat e-court proceeding is whether Higgins fraudulently secured title to the Property from Stathakis’ s limited liability company before his preliminary order of forfeiture wa s entered. That issu e was not litigated in Stathakis’s criminal proceedi ngs; rather, the district cour t presumed—for purposes of substitute-property calculation—that Stathakis’ s state-court represen tations regarding his ownership of the Property were meritorious . Higgins does not urge application of preclusion to the district cour t’s reliance on Stathakis’s re presentations of ownership, which would not assist it. In any event, Hi ggins itself did not litiga te any claim to the Property against Stathakis during his crimin al case. Rather, Higgins secured possession of the Property only through a third-party an cillary proceeding in which the government agreed to relinquish the Property to it. See 21 U.S.C. § 853(n) (a uthorizing third parties to assert claims to ownership of property following entry of preliminary order of forfeiture). In sum, because Stathaki s and Higgins did not litigate, during the criminal case, the issue of who possessed lawful pre-forf eiture title to the Pr operty, the relitigation exception to the Anti-Injunction Act is inapplicable. Having concluded that the district court was correct in identifying its lack of ju risdiction to issue an in junction, we need not reach Higgins’s alte rnative arguments.6 In so ruling, we do not su ggest that Stathakis can use the state-court proceeding to

obtain prospective title to the Property, a result expressly forbidden by the federal

criminal forfeiture statute. See 21 U.S.C. § 853(h) (“Any prop erty right or interest not exercisable by, or transferable for value to, the United States shall expire and shall not revert to the defendant . . . .”); see also Fed. R. Crim. P. 32.2 (explaining that, “[a]t sentencing . . . the preliminary forfeiture or der becomes final as to the defendant”). Rather, we understand that, consistent with re presentations made to the district court, if the state court concludes that Stathakis posse ssed lawful title to the Property prior to the entry of his criminal judgment, the government will seek an order directing Stathakis to forfeit the Property. See App’x 485–86 (“If there was a fi nal adjudication at state court that the property was Mr. Stathakis’ the Unite d States would move . . . to amend the final order of forfeiture to include that property.”). We have considered Higgins’s other argumen ts and conclude that they are without merit. Accordingly, we AFFIRM the judgment of the district court. We further direct the Clerk of Court to mail a copy of this or der to the United States’ counsel of record in the criminal proceedings.

FOR THE COURT: Catherine O’Hagan Wolfe, Clerk of Court