[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT

________________________

No. 11-15670

________________________

D.C. Docket No. 9:08-cv-81244-KAM

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

versus

ADT SECURITY SERVICES, INC.,

Claimant - Appellee,

THOMAS ROSSI,

BAYHILL DEVELOPMENT, LLC,

Claimants - Appellants.

________________________

Appeal from the United States District Court

for the Southern District of Florida

________________________

(June 13, 2013)

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Before MARTIN, HILL and BARKSDALE,∗ Circuit Judges.

PER CURIAM:

The appeal in this civil forfeiture in rem action is from a judgment under 

Federal Rule of Civil Procedure 54(b) (where action presents more than one claim 

for relief, or when multiple parties are involved, court may direct entry of final 

judgment to one or more, but not all, claims or parties if court expressly determines 

no just reason for delay). Bayhill Development, LLC, and Thomas Rossi, who 

represents he is Bayhill’s managing member, challenge: the 11 October 2011 

order denying attorney’s fees and costs associated with their moving successfully 

to set aside a default; and the 13 October 2011 Rule 54(b) judgment, which granted

summary judgment to the Government based on Bayhill’s lack of standing. The 

appeal from the fees-and-costs order is DISMISSED; the Rule 54(b) judgment is 

AFFIRMED.

I.

On 24 October 2008, the Government filed a verified complaint for civil 

forfeiture in rem against: all funds in the account of Property Futures, Inc.; and all 

interests of Robert Gannon, Property Futures, Inc., and Gannon Family Company, 

LLC (Gannon), in four real-estate properties, located at: 2801 Gateway Drive, 

Pompano Beach, Florida; 32100 U.S. Highway 19 North, Palm Harbor, Florida; 

 ∗ Honorable Rhesa H. Barksdale, United States Circuit Judge for the Fifth Circuit, sitting by 

designation. 

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3040 Industry Drive, East Hempfield, Pennsylvania; and 111 Windsor Drive, Oak 

Brook, Illinois. The complaint asserted the properties were forfeitable under 18 

U.S.C. § 981(a)(1)(c) for representing “proceeds derived, directly or indirectly, 

from the illegal mail fraud, wire fraud, and racketeering activities of the defendants 

in the case of [United States v. Artuso, No. 08-60014-CR-DMM]”. Those 

defendants had been convicted “for conspiracy under the Racketeer Influenced 

Corrupt Organizations Act . . . , multiple mail and wire fraud counts, and money 

laundering conspiracy”; their convictions were affirmed on appeal after this

forfeiture action was filed. United States v. Artuso, Nos. 08-17263 & 09-16093, at 

*2 (11th Cir. 20 June 2012). 

In short, those defendants, with the help of an officer of ADT Security 

Services, Inc. (ADT), defrauded ADT by causing it to sell the above-described

properties at lower-than-market prices to four different manager-managed LLCs;

the LLCs then leased those properties back to ADT at higher-than-market rental 

rates. The following three sales are relevant to this action: the Pompano Beach 

property was sold to Efficient Realty & Development, L.L.C., a Florida limited 

liability company (Efficient Realty FL); the Palm Harbor property was sold to 

Westmore Properties, LLC, a Florida limited liability company (Westmore); and 

the Pennsylvania property was sold to Efficient Realty & Development, LLC, a 

Pennsylvania limited liability company (Efficient Realty PA). The aboveCase: 11-15670 Date Filed: 06/13/2013 Page: 3 of 27 
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referenced account of Property Futures, Inc., contains proceeds from rents paid by 

ADT to the LLCs. 

As noted, this action was filed in 2008 to forfeit the properties and rental 

proceeds generated by them. As a result of the criminal proceeding, the interests 

of the convicted defendants in the LLCs, properties, and bank account were 

forfeited to the Government in 2009. Gannon and others filed claims to the 

properties and proceeds; ADT filed its verified claim on 2 June 2009. 

On 19 June 2009, the Government moved successfully for entry of default 

against Bayhill and Rossi (as noted, Rossi represents he is Bayhill’s managing 

member) for failing to file required claims in this proceeding as possible claimants 

to the properties. The Government submitted an affidavit stating that Bayhill had a 

ten percent interest in three of the four properties for which forfeiture was sought 

(the two Florida properties and the Pennsylvania property).

On 28 June 2009, the Government moved to amend its verified complaint to 

describe more precisely the properties to be forfeited. Specifically, more than just 

the interests of Gannon were to be forfeited; the motion acknowledged more 

parties may have an interest in the properties. Accordingly, the amended 

complaint listed only the four properties, and also included “all lease payment 

monies being held in escrow by the United States Marshals Service” for those

properties. (The Government moved to amend a second time, but only to clarify it 

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was not seeking to forfeit the interests of two named “innocent mortgageholders”;

the motion was granted. This second amended complaint, filed 27 July 2009, is the

operative complaint.)

Bayhill and Rossi moved on 11 July 2009 to set aside the default, asserting 

the original complaint only requested forfeiture of Gannon’s interests. They also 

sought attorney’s fees and costs associated with their motion. The Government did 

not oppose vacating the default. 

Pursuant to 28 U.S.C. § 636(c) (upon consent of parties, full-time magistrate 

judge may conduct proceedings in civil matter and enter judgment when 

designated to exercise jurisdiction by district court) and Federal Rule of Civil

Procedure 73 (same, pursuant to authorization under § 636(c)), the magistrate 

judge, by a 1 September 2009 order, granted Bayhill’s and Rossi’s motion, 

requiring the Government to pay their attorney’s fees and costs incurred by moving 

to set aside the default. The order did not, however, state the amount to be paid. 

The Government moved unsuccessfully for reconsideration. 

Upon Bayhill’s notice of non-consent to magistrate-judge jurisdiction, 

however, this proceeding was returned to the district judge; it was then referred by 

that judge to the magistrate judge “for appropriate disposition or report and 

recommendation of all pre-trial matters”. Thereafter, on 1 March 2010, Bayhill 

and Rossi moved for a specified amount of fees and costs. Because of the aboveCase: 11-15670 Date Filed: 06/13/2013 Page: 5 of 27 
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described jurisdictional shuffling, the magistrate judge’s report and 

recommendation (R&R) was not issued until 6 May 2010; it recommended Bayhill 

and Rossi receive $35,647.50 in fees and $109.76 in costs. 

On 7 June 2010, the Government moved the district court to revisit the 

magistrate judge’s 1 September 2009 order awarding Bayhill and Rossi attorney’s 

fees and costs and the subsequent order denying the Government’s motion to 

reconsider. Simultaneously, the Government filed its objections to the 6 May 2010

R&R recommending the amounts Bayhill and Rossi should receive. 

Earlier, on 7 September 2009, Bayhill, “by and through its Managing 

Member, Thomas Rossi”, filed a verified claim, asserting a ten percent interest in 

the two Florida properties and the Pennsylvania property, and a ten percent interest 

in the escrowed lease payments. A footnote to the claim stated:

Bayhill Development, LLC, has at times been referred to 

interchangeably as Bayhill Development, Inc., as a 

function of typographical errors. This claim is made on 

behalf of both entities and the term ‘Bayhill’ is intended 

here to refer to both entities. As the government is 

aware, Bayhill owns its ten percent interest in each of the 

properties, through its membership in [Westmore], 

[Efficient Realty FL], and [Efficient Realty PA] and so 

Mr. Rossi makes this claim on behalf of Bayhill and 

those other entities in which Bayhill is a member to ten 

percent (10%) of the value of the underlying defendant 

properties identified herein and to ten percent (10%) of 

all monies held in escrow with respect to such properties 

as identified herein.

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The claim was verified and signed by Rossi “on behalf of Bayhill Development, 

LLC[,] and all other relevant entities herein identified”.

On 6 April 2010, pursuant to Rule G(8)(c)(i)(B) of the Federal Rules of 

Civil Procedure “Supplemental Rules for Admiralty or Maritime Claims and Asset 

Forfeiture Actions” and Federal Rule of Civil Procedure 56, the Government 

moved to strike the claims of Bayhill and Gannon for lack of standing and/or for

partial summary judgment; the Government requested an evidentiary hearing on 

that motion. At a 17 May 2010 motion hearing before the magistrate judge, the 

Government presented documentary evidence without objection; on the other hand, 

Bayhill presented no evidence to show standing, relying only on argument and 

earlier pleadings. 

On 11 June 2010, Bayhill and Gannon moved for leave to file an amended 

verified claim, seeking to clarify: the claims made; by whom they were made; and 

the authority of the parties to file them in their respective capacities. The 

Government and ADT opposed the motion.

The magistrate judge’s 23 July 2010 R&R recommended: granting in part 

the Government’s motion for partial summary judgment; and denying as moot the

portion of the motion to strike Bayhill’s and Gannon’s claims. On 3 and 23 

August 2010, the magistrate judge issued an omnibus order and amended omnibus 

order on outstanding motions, which included, inter alia, striking Bayhill’s and 

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Gannon’s motion for leave to file an amended verified claim “as moot without 

prejudice with leave to refile”, with instruction that should the R&R on summary 

judgment be adopted by the district court as to Bayhill, the motion for leave to file 

an amended verified claim “must be denied as moot or otherwise denied as futile

as Bayhill will be deemed without standing to file such motion”. 

On 30 August 2010, Gannon entered into a stipulation and settlement 

agreement, approved by the court on 20 September 2010, through which Gannon, 

inter alia, withdrew, with prejudice, all claims relating to the forfeiture action. 

Accordingly, because Gannon’s 9.9 percent interest is no longer at issue, and 

because 80.1 percent of the interest in the three LLCs was forfeited to the 

Government as a result of the criminal proceeding, this forfeiture proceeding

concerns only Bayhill’s claimed ten percent interest in the three LLCs. 

On 7 October 2010, the district judge heard oral argument on objections to 

the R&R on summary judgment. An order adopting that R&R was issued a year 

later, on 3 October 2011. United States v. All Funds in the Account of Prop. 

Futures, Inc., 820 F. Supp. 2d 1305 (S.D. Fla. 2011). 

On 11 October 2011, the district judge entered an order addressing: 

Bayhill’s and Rossi’s 1 March 2010 motion for an order awarding a specified 

amount of fees and costs, which the magistrate judge recommended granting in the

6 May 2010 R&R; and the Government’s 7 June 2010 motion to revisit the 

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magistrate judge’s 1 September 2009 order awarding Bayhill and Rossi attorney’s 

fees and costs and the subsequent order denying the Government’s motion to 

reconsider, which had been deferred to the district court in the magistrate judge’s 

omnibus order and amended omnibus order. United States v. All Funds in the 

Account of Prop. Futures, Inc., No. 08-81244-CIV, 2011 WL 7020934 (S.D. Fla. 

11 Oct. 2011). Acknowledging the magistrate judge had operated under consent 

jurisdiction at the time of the 1 September 2009 order awarding fees and costs, the 

district court concluded that the amount of the award not being determined at that 

time rendered that order’s award of fees and costs not final, citing Hibiscus Assocs. 

Ltd. v. Bd. of Trs. of Policemen & Firemen Ret. Sys. of Detroit, 50 F.3d 908, 921-

22 (11th Cir. 1995) (where amount of fee award not yet determined, award not 

final). All Funds in the Account of Prop. Futures, Inc., 2011 WL 7020934, at *1-2. 

With both motions properly before it, the district court: granted the Government’s 

motion to revisit the magistrate judge’s order awarding fees and costs; denied 

Bayhill’s and Rossi’s motion for an order awarding an amount of fees and costs; 

and did not adopt the R&R which had recommended awarding attorney’s fees and 

costs associated with Bayhill’s and Rossi’s moving to set aside the entry of default, 

ruling they were not “prevailing parties” under the fee-shifting provisions of the 

Civil Asset Forfeiture Reform Act of 2002 (CAFRA), 28 U.S.C. § 2465. Id. at *2. 

No judgment has been entered, however, with respect to this order.

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Two days later, on 13 October 2011, a Rule 54(b) judgment was entered,

dismissing Bayhill’s claim with prejudice, and dismissing Bayhill as a claimant.

(The adopted R&R and the Rule 54(b) certification confirm the judgment entered 

for the Government on 13 October was a full and final resolution of all claims 

presented by Bayhill.) No judgment was entered, however, with respect to Rossi in 

his individual capacity. And, as noted, the fees-and-costs denial is not included in 

the Rule 54(b) judgment.

II.

Bayhill and Rossi challenge the district court’s: not awarding the fees and 

costs associated with their moving to set aside the default; and granting summary 

judgment in favor of the Government, based on lack of standing.

A.

At the outset, it is necessary to decide what parties and claims are properly 

before us. It goes without saying that jurisdiction on appeal requires a final and 

appealable order for review, or some other jurisdictional basis. 28 U.S.C. §§ 1291 

& 1292; see also Atlantic Fed. Sav. & Loan Ass’n v. Blythe Eastman Paine 

Webber, Inc., 890 F.2d 371, 376 (11th Cir. 1989) (the Supreme Court has 

recognized three exceptions to the final judgment rule: “the collateral order 

doctrine, the doctrine of practical finality, and the exception for intermediate 

resolution of issues fundamental to the merits of the case”). As discussed below, 

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we have jurisdiction only over the Government and Bayhill, and only pertaining to

the summary judgment.

1.

ADT is not a party to the challenged summary judgment provided for in the 

Rule 54(b) judgment and, therefore, is not a party to this appeal. Neither the 

Government’s adopting ADT’s briefing nor ADT’s opposing Bayhill’s and Rossi’s 

motion to amend their verified claim is sufficient to render ADT a party to this 

appeal. As provided in the Rule 54(b) judgment dismissing Bayhill’s claim, with 

prejudice, ADT’s claim was severed and continued. 

2.

The Rule 54(b) judgment dismissed Bayhill’s claim, as well as Bayhill as a 

claimant/party. The judgment did not refer to Rossi, who did not file a claim in his 

individual capacity. Indeed, Bayhill’s verified claim states: “Mr. Rossi makes this 

claim on behalf of Bayhill and those other entities in which Bayhill is a member”. 

(Emphasis added.) There is no final judgment against Rossi; nor does he assert, 

much less demonstrate, any other jurisdictional basis on which to challenge the

summary judgment. Therefore, he is not a party to this appeal.

3.

Regarding Bayhill’s challenging the 11 October 2011 order denying fees and 

costs, and as noted above, that order is not a final judgment. And, that order does 

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not fall within one of the above-described exceptions to the final-judgment rule. 

Therefore, we lack jurisdiction to review it.

B.

Bayhill challenges the summary judgment for the Government, which held 

Bayhill lacks standing to file a verified claim. A summary judgment is reviewed 

de novo, applying the same standard as did the district court. E.g., Bozeman v. 

Orum, 422 F.3d 1265, 1267 (11th Cir. 2005). In so doing, the non-movant’s

version of the facts is accepted as true, and all justifiable inferences are drawn in 

the non-movant’s favor. Id. Summary judgment is proper if the evidence shows 

“no genuine dispute as to any material fact and the movant is entitled to judgment 

as a matter of law”. Fed. R. Civ. P. 56(a).

The Government’s challenge to Bayhill’s standing rests in part on the 

Government’s asserting Bayhill Development, LLC, does not exist as a jural entity. 

The Government is correct in maintaining Bayhill is not a properly formed limited 

liability company (LLC). An LLC’s being a “relatively new, hybrid form of 

business entity”, CARTER G. BISHOP & DANIEL S. KLEINBERGER, LIMITED 

LIABILITY COMPANIES: TAX AND BUSINESS LAW ¶ 1.01 (2012), an understanding of 

an LLC is critical to resolution of the Government’s claiming lack of standing. 

The limited liability company (LLC) is a relatively new, 

hybrid form of business entity that combines the liability 

shield of a corporation with the federal tax classification 

of a partnership. A creature of state law, each LLC is 

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organized under an LLC statute that creates the company, 

gives it a legal existence separate from its owners (called 

“members”), shields those members from partner-like 

vicarious liability, governs the company’s operations, 

and controls how and when the company comes to an 

end. The essence of an LLC is the co-existence of 

partnership tax status with corporate-like limited liability.

Id. (footnotes omitted).

Florida LLCs have broad powers to conduct their business and may be 

formed for any lawful purpose. FLA. STAT. §§ 608.403, .404(1)-(17). A Florida

LLC is properly formed by, inter alia, filing its name and articles of incorporation 

with the Florida Department of State. Id. §§ 608.405, .407. Any “person”, 

whether natural or legal, may be a member of an LLC. Id. §§ 608.405, .402(25). 

An LLC is managed by its members, unless the articles of incorporation expressly 

provides a manager will manage the LLC. Id. § 608.422. In a member-managed

LLC, each member is the LLC’s agent; ordinarily, an act of a member for 

apparently carrying on, in the ordinary course, the LLC’s business binds the LLC.

Id. § 608.4235(1)(a). In a manager-managed LLC, members are not the LLC’s 

agent solely by virtue of being a member; ordinarily, an act of a manager for 

carrying on, in the ordinary course, the LLC’s business binds the LLC. Id.

§ 608.4235(2)(a). “A manager must be designated, appointed, elected, removed, or 

replaced by a vote, approval or consent of a majority-in-interest of the members”. 

Id. § 608.422(4)(c)(1).

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A Pennsylvania LLC may carry on any lawful business, and, unless 

otherwise stated in its articles of incorporation, may engage in all lawful activities 

for which LLCs may be organized. 15 PA. CONS. STAT. ANN. §§ 8921(a), 8911(a). 

An LLC is properly formed when a person, including a non-member, files articles 

of incorporation with the Pennsylvania Secretary of State. Id. §§ 8912, 8914. 

Pennsylvania LLCs are member-managed, unless the articles of incorporation 

specify manager-management. Id. § 8941. In a member-managed LLC, members 

are the LLC’s agents for the purpose of its business; likewise, in a managermanaged LLC, managers are the LLC’s agents for the purpose of its business. Id. 

§ 8943(a)-(b). Pennsylvania allows selection and qualification of managers to be 

prescribed in the LLC’s operating agreement. Id. § 8941(c). Unless a unanimous 

vote is required as provided in the operating agreement, “the affirmative vote or 

consent of a majority of the members or managers . . . entitled to vote on a matter 

shall be required to decide any matter to be acted upon by the members or 

managers”. Id. § 8942(a).

Bayhill Development, Inc., was registered in Delaware in 2001. But, in the 

operating agreements for Westmore, Efficient Realty FL, and Efficient Realty PA,

Bayhill Development, LLC, is the entity identified as a member of those LLCs; 

and, it is listed in those operating agreements as owning a ten percent interest in 

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the three properties owned by those three LLCs. That ownership interest is 

claimed as a result of Bayhill’s membership in those three LLCs. 

In 2006, Rossi reinstated Bayhill Development, Inc., after it had become 

inactive, then filed articles of organization in Delaware for a new (another) LLC: 

Bayhill Development Group, LLC. Rather than bring this information to the 

court’s attention, Bayhill’s verified claim included the above-discussed footnote,

which explained the difference in Bayhill’s name as a mere typographical error; 

Rossi then verified and signed the claim “on behalf of Bayhill Development, LLC,

and all other relevant entities herein identified”. 

At the 17 May 2010 hearing, however, on the Government’s summaryjudgment motion, the Government submitted, without objection, documents 

supporting the non-existence of a certificate of incorporation, certificate of limited 

partnership, or articles of organization filed for the first Bayhill LLC, Bayhill

Development, LLC, in New York, where Bayhill claimed it was organized. 

Bayhill’s counsel admitted as much at that hearing, stating: “Bayhill 

Development, LLC[,] was not properly formed as an LLC”. 

Bayhill contends it exists, however, in the form of either a de facto LLC or 

an LLC by estoppel. The adopted R&R stated it did not need to consider this issue 

in order to reach its recommendation that Bayhill lacked standing to file a verified 

claim. The R&R stated in a footnote, inter alia:

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[B]ecause the undersigned finds that neither [Bayhill nor 

Gannon] has standing, as a substantive matter, to file a 

claim on behalf of themselves to property belonging to 

the LLCs, it’s unnecessary to address the Government’s 

argument that Bayhill, LLC, since it wasn’t properly 

formed, is not a proper party claimant, or Bayhill’s 

counter-argument that Bayhill[,] LLC[,] exists by virtue 

of estoppel or de facto. Nonetheless, the [c]ourt feels 

constrained to point out that while the undersigned 

previously accepted as true Rossi’s explanation for 

failing to form the proper legal entities for purposes of 

the Supplemental Rule [G(5)] analysis, there is 

substantial evidence in this record that Rossi’s attestation 

in his supporting statement under oath . . . in support of 

the claim is lacking in credibility. The Government 

evidence adduced at the hearing on the instant motion 

would in all likelihood compel this court to make such 

finding if one were required.

All Funds in the Account of Prop. Futures, Inc., 820 F. Supp. 2d at 1322 n.22. 

Accordingly, Bayhill mentions its alternative LLC contention only in a 

footnote in its opening brief; after the Government thoroughly briefed this issue in 

its response brief, Bayhill, again, provided only a footnote in its reply brief, stating, 

inter alia: 

Whether or not Bayhill was properly formed as an LLC, 

as the record below shows without dispute, Bayhill paid 

taxes each year . . . , and otherwise meets all criteria for a 

de facto LLC or an LLC by estoppel and the Government 

has no standing to challenge the same in any event . . . . It 

is not material to the appeal based on the manner in 

which the lower court addressed it. 

This contention’s cursory mention in two footnotes is insufficient for our 

consideration of whether Bayhill is a de facto LLC or one by estoppel; 

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accordingly, the contention is abandoned. See, e.g., Fed. R. App. P. 28(a)(9); In re 

Globe Mfg. Corp., 567 F.3d 1291, 1297 n.3 (11th Cir. 2009) (cursory briefing of 

argument deemed waived); Rowe v. Schreiber, 139 F.3d 1381, 1382 n.1 (11th Cir. 

1998) (acknowledging issue in briefing without argument deemed abandoned); 

Cont’l Technical Servs., Inc. v. Rockwell Int’l Corp., 927 F.2d 1198, 1199 (11th 

Cir. 1991) (“An argument not made is waived”.).

In the light of Bayhill’s not being a properly formed LLC, our evaluating the 

district court’s granting summary judgment to the Government against Bayhill 

requires our considering whether Bayhill, despite its not being an LLC, is an entity 

that can make an appearance. If we conclude it can do so, we must then decide 

whether it has standing to file a verified claim, either on its behalf or on behalf of 

Westmore, Efficient Realty FL, and Efficient Realty PA. Finally, if we decide 

Bayhill has standing, we must still decide whether its claim was filed properly. 

For the reasons presented infra, because we hold Bayhill can make an appearance 

but lacks standing, we do not reach proper filing vel non.

1.

Standing, of course, is a threshold issue, subject to de novo review. E.g., 

Region 8 Forest Serv. Timber Purchasers Council v. Alcock, 993 F.2d 800, 806 

(11th Cir. 1993). A forfeiture claimant must satisfy both constitutional and 

statutory standing requirements to file a verified claim properly. E.g., United 

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States v. $38,000.00 in United States Currency, 816 F.2d 1538, 1543 (11th Cir. 

1987).

Claimant is required first to demonstrate an interest in the property sufficient 

for Article III standing; “otherwise, there is no ‘case or controversy,’ in the 

constitutional sense, capable of adjudication in the federal courts”. Id. (citation 

omitted). If claimant shows that interest, the well-known three-factor test for 

standing requires: (1) claimant’s having suffered an “‘injury in fact’—an invasion 

of a legally protected interest that is (a) concrete and particularized, and (b) actual 

or imminent, not conjectural or hypothetical”; (2) a causal connection between the 

injury and the complained-of conduct; and (3) redressibility of the injury by a 

favorable decision. United States v. Hays, 515 U.S. 737, 743 (1995) (citing Lujan 

v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). 

Ownership is not required for Article III standing; a possessory interest will 

suffice. E.g., $38,000.00, 816 F.2d at 1544. Such interests are evaluated under 

state law; thereafter, federal law determines whether those interests may be 

forfeited. United States v. Fleet, 498 F.3d 1225, 1231 (11th Cir. 2007). 

The purpose of claimant’s being required also to establish statutory standing 

is, inter alia, to “minimize the danger of false claims by requiring claims to be 

verified or solemnly affirmed”. United States v. $8,221,877.16 in U.S. Currency, 

330 F.3d 141, 150 n.9 (3d Cir. 2003). Governing this action are 18 U.S.C. § 983, 

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which identifies the general rules for civil forfeiture proceedings, and the 

corresponding Federal Rule of Civil Procedure “Supplemental Rules for Admiralty 

or Maritime Claims and Asset Forfeiture Actions”. See Fed. R. Civ. P. Supp. R. 

A(1)(B) (Supp. R.) (supplemental rules govern “forfeiture actions in rem arising 

from a federal statute”). 

Any person or entity asserting a claim in a civil forfeiture in rem proceeding 

“may contest the forfeiture by filing a claim in the court where the action is 

pending”. Supp. R. G(5)(a)(i). To satisfy statutory standing, the claim must, inter 

alia, “identify the specific property claimed”; “identify the claimant and state the 

claimant’s interest in the property”; and “be signed by the claimant under penalty 

of perjury”. Supp. R. G(5)(a)(i)(A)-(C). See also 18 U.S.C. § 983(a)(2)(c) (claim 

must: identify specific property claimed; state claimant’s interest in that property; 

and “be made under oath, subject to penalty of perjury”). Although strict 

adherence to the filing requirements is necessary to perfect statutory standing, 

United States v. Real Prop., 135 F.3d 1312, 1316 (9th Cir. 1998) (collecting cases 

where courts condition standing to contest forfeiture or garnishment actions on 

strict compliance with filing requirements), “technical noncompliance with the 

procedural rules governing the filing of claims may be excused”, United States v. 

Premises & Real Prop. at 4492 Livonia Rd., Livonia, N.Y., 889 F.2d 1258, 1262 

(2d Cir. 1989). Our research has not revealed any decisions striking a claim, under 

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analogous circumstances, for failure to satisfy Supplemental Rule G’s statutorystanding requirements. 

Rossi’s signing the verified claim on behalf of Bayhill Development, LLC,

constitutes, at most, excusable technical noncompliance. Rossi signed the verified 

claim on behalf of Bayhill Development, LLC, and he “solemnly affirmed” its 

validity under penalty of perjury. See, e.g., Supp. R. G, advisory comm. notes sub.

5 (“An artificial body that can act only through an agent may authorize an agent to 

sign for it.”). Therefore, Bayhill Development, LLC, by and through Rossi, is 

“properly before the court” within the technical meaning of Supplemental Rule 

G(5); on the other hand, of course, whether a non-existent legal entity can 

ultimately assert a valid claim is, as the magistrate judge recommended and the 

district court held, a question of “substantive standing jurisprudence” in 

determining whether the requisite Article III case or controversy exists. Our 

technical-noncompliance ruling also comports with the need to consider Rule G(8) 

with the leniency accorded parties under the liberal amendment provisions of 

Federal Rule of Civil Procedure 15. See Supp. R. G, advisory comm. notes sub. 8 

(“As with other pleadings, the court should strike a claim or answer only if 

satisfied that an opportunity should not be afforded to cure the defects under Rule 

15.”).

2.

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As discussed, although Bayhill may have complied with the technical 

requirements of the supplemental rules, it must have substantive standing to 

contest the civil forfeiture in rem. Bayhill’s verified claim states it is filed “on 

behalf of Bayhill and those other entities in which Bayhill is a member to ten 

percent (10%) of the value of the underlying defendant properties”. Accordingly, 

it must be determined: (a) whether Bayhill has standing to assert a claim on its 

own behalf; and (b) whether it has standing to assert a claim on behalf of 

Westmore, Efficient Realty FL, and Efficient Realty PA.

a.

As stated above, to have standing, Bayhill must first have an ownership 

interest (a possessory interest will suffice) in the defendant properties. Such 

interest is evaluated by the law of the jurisdiction creating the asserted interest, i.e.

state law, see United States v. Ramunno, 599 F.3d 1269, 1272 (11th Cir. 2010), 

which, here, is that of Florida and Pennsylvania. Under both Florida and 

Pennsylvania law, property acquired by an LLC is property of that LLC. FLA.

STAT. § 608.425 (property contributed to the LLC, acquired by the LLC through 

purchase, or acquired with LLC funds is property of the LLC); 15 PA. CONS. STAT.

ANN. § 8923 (“A member has no interest in specific property of a[n] [LLC].”) 

Because Bayhill’s claimed interest in the properties arises only out of its 

membership in the LLCs owning those properties, Bayhill cannot assert a claim on 

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its own behalf. Accordingly, the district court properly granted summary judgment 

in this regard.

b.

Bayhill’s not having standing to assert a claim on its own behalf does not

alone prevent its asserting a claim on behalf of Westmore, Efficient Realty FL, and 

Efficient Realty PA. Again, Florida and Pennsylvania law inform this 

determination. 

The three LLCs provided in their respective operating agreements that each 

LLC would be manager-managed (as opposed to member-managed), as allowed 

under Florida and Pennsylvania law. FLA. STAT. § 608.422 (if provided in 

operating agreement, management of LLC shall be vested in manager or managers 

and LLC shall be a manager-managed company); 15 PA. CONS. STAT. ANN.

§ 8941(b) (management of company shall be vested, as provided in certificate of 

organization, in one or more managers). 

Under both States’ laws, a member of a manager-managed LLC does not 

have the authority to act on behalf of the LLC solely by reason of being a member, 

FLA. STAT. § 608.4235, 15 PA. CONS. STAT. ANN. § 8943; nor is a member the 

proper party to proceedings by or against that LLC, FLA. STAT. § 608.462, 15 PA.

CONS. STAT. ANN. § 8991(b). In Pennsylvania, however, a member may file an 

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action on behalf of the LLC, if authorized by vote of the members. 15 PA. CONS.

STAT. ANN. § 8992(1). 

Bayhill asserts the adopted R&R “confused the concept of ‘authority’ with 

‘standing’” because Bayhill was acting as the LLCs’ agent; in that vein, Bayhill 

maintains it had the “authority” to file on behalf of the LLCs and its standing is 

irrelevant. The above statutes clearly refute this assertion.

Bayhill also contends it and Gannon became managers of the LLCs—and,

thus, the proper parties to file verified claims on behalf of those LLCs—after the 

criminal forfeiture left only Bayhill and Gannon as the remaining members of the 

LLCs; it asserts they became managers after Bayhill and Gannon voted each other 

as managers, as provided for in the respective LLCs’ operating agreements. As the 

adopted R&R concluded, however, this contention is without merit. Bayhill is 

correct that the operating agreements allow Bayhill and Gannon, as members, to 

remove and replace managers by vote. Operating Agreements at § 4.1 (powers of 

LLC exercised by authority of one manager, “as may be determined by the 

unanimous consent of all of the Members from time to time”). Statutory law 

allows the same. See FLA. STAT. § 608.422(4)(c)(1) (manager must be, inter alia, 

replaced by vote, approval, or consent of majority-in-interest of members), 15 PA.

CONS. STAT. ANN. § 8942(a) (affirmative vote or consent of majority of members 

entitled to vote on matter required to decide any matter to be acted upon by 

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members or managers). Any substantive merit to this contention fails, however, as 

an evidentiary matter. We agree with the adopted R&R’s analysis and conclusion:

The argument itself relies on the declaration of Bayhill’s 

attorney in this action . . . , in which [he], as the witness, 

attempts to show through hearsay that the Claimants “as 

the only remaining members,” of the [LLCs], voted and 

agreed to serve as the LLCs’ agents to file the claims at 

issue. . . . No date is provided as to when this action 

allegedly took place, nor is any supporting 

documentation offered into evidence to prove the 

existence of the alleged resolutions voted upon. More 

importantly, the “declarant” stating that the vote took 

place and describing the actions taken is not alleged to 

have been present at the vote and, therefore, cannot speak 

from personal knowledge, but only from what Claimants 

told him. This, of course, is the purest form of 

inadmissible hearsay. 

All Funds in the Account of Prop. Futures, Inc., 820 F. Supp. 2d at 1331-32.

As the adopted R&R states correctly: “As an in rem proceeding, a civil 

forfeiture action is unlike most other civil actions in that the defendant is the 

property subject to forfeiture and, as such, it is the claimant, not the plaintiff, who 

has the burden to demonstrate standing by a preponderance of the evidence”. Id. at 

1325 (emphasis added) (citing $38,000.00, 816 F.2d at 1543 n.11; Supp. R. 

G(8)(c)(i)(B) (at any time before trial, Government may move to strike claim 

because claimant lacks standing). Bayhill has failed to satisfy its burden of 

demonstrating it had authority to file a claim on behalf of Westmore, Efficient 

Realty FL, and Efficient Realty PA. 

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A final point on standing vel non compels addressing the following 

Pennsylvania statute: “The lack of authority of a member or manager to sue on 

behalf of a limited liability company may not be asserted as a defense to an action 

by the company or by the company as a basis for bringing a subsequent suit on the 

same cause of action”. 15 PA. CONS. STAT. ANN. § 8993. At first glance, this

appears to bar the Government’s challenging Bayhill’s filing a claim on behalf of 

Efficient Realty PA. The statute, however, is inapplicable. 

At the outset, the Pennsylvania statute contemplates when a member or 

manager files an action, as opposed to when such member or manager files a claim

in a civil forfeiture in rem action. As we are unaware of the statute’s being applied 

in this manner, we will not extend its reach in this circumstance. 

The committee comments to this Pennsylvania statute provide further

support for this conclusion, identifying the purpose of the statute as preventing a 

company “from relitigating claims that were brought or settled without authority”. 

15 PA. CONS. STAT. ANN. § 8993 comm. cmt. In the committee’s view, the 

purpose of questioning a member or manager’s authority to file an action is to 

protect passive members; accordingly, “as long as errant litigants are liable for 

damages”, this defense is unnecessary. Id. This is not the purpose of questioning 

authority in the instance of a civil forfeiture in rem proceeding. 

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Indeed, pursuant to Supplemental Rule G(8)(c), the Government is provided 

direct authority to question Bayhill’s standing; the Rule provides, in relevant part: 

“At any time before trial, the [G]overnment may move to strike a claim or 

answer . . . because the claimant lacks standing”. Supp. R. G(8)(c)(i)(B). The

authority to file a claim is part of the statutory-standing equation. Occurring here, 

the Government’s motion to strike was presented “as a motion to determine after a 

hearing or by summary judgment whether the claimant can carry the burden of 

establishing standing by a preponderance of the evidence”. Supp. R. 

G(8)(c)(ii)(B). 

Because the Supplemental Rules explicitly allow the Government to 

question Bayhill’s standing to file a verified claim on behalf of Efficient Realty 

PA, we conclude the Pennsylvania statute is not applicable in this context. 

Accordingly, the district court properly concluded Bayhill lacks standing for all 

three LLCs.

3.

As stated supra, because Bayhill lacks standing to assert a claim on behalf of 

itself or of Westmore, Efficient Realty FL, and Efficient Realty PA, we do not 

reach whether Bayhill properly filed a claim. 

III.

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For the foregoing reasons, the appeal from the 11 October 2011 order 

denying attorney’s fees and costs is DISMISSED; the 13 October 2011 Rule 54(b)

judgment is AFFIRMED.

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