Case 2:18-cr-00422-DJH Document 507-2 Filed 03/20/19 Page 1 of 77
IN THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 18-56455

In re: ANY AND ALL FUNDS HELD IN REPUBLIC BANK OF ARIZONA 

ACCOUNTS XXXX1889, XXXX2592, XXXX1938, XXXX2912, AND 

XXXX2500,

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

JAMES LARKIN, Real Party in Interest Defendant; JOHN BRUNST, Real Party 

in Interest Defendant; MICHAEL LACEY, Real Party in Interest Defendant; 

SCOTT SPEAR; Real Party in Interest Defendant,

Movants-Appellants.

On Appeal from United States District Court for the Central District of California

The Honorable R. Gary Klausner, United States District Judge

OPENING BRIEF OF APPELLANTS JAMES LARKIN, 

JOHN BRUNST, MICHAEL LACEY AND SCOTT SPEAR

James C. Grant 

DAVIS WRIGHT TREMAINE LLP

920 Fifth Avenue, Suite 3300

Seattle, WA 98104

Telephone: (206) 622-3150

Facsimile: (206) 757-7700

Email: jamesgrant@dwt.com

Robert Corn-Revere 

Ronald G. London

DAVIS WRIGHT TREMAINE LLP

1919 Pennsylvania Ave., NW, Suite 800

Washington, DC 20006

Telephone: (202) 973-4200

Facsimile: (202) 973-4499

Email: bobcornrevere@dwt.com

 ronaldlondon@dwt.com

Additional Counsel Listed on Next Page

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List of Additional Counsel

Thomas H. Bienert, Jr.

Whitney Z. Bernstein

BIENERT, MILLER &

 KATZMAN, PLC

903 Calle Amanecer

Suite 350

San Clemente, CA 92673

Telephone: (949) 369-3700

Facsimile: (949) 369-3701

Email: tbienert@bmkattorneys.com

 wbernstein@bmkattorneys.com

Paul John Cambria, Jr.

Erin McCampbell Paris

LIPSITZ GREEN SCIME

 CAMBRIA LLP

42 Delaware Avenue

Suite 300

Buffalo, NY 14202-3857

Telephone: (716) 849-1333

Email: pcambria@lglaw.com

 emccampbell@lglaw.com

Bruce Feder

FEDER LAW OFFICE, P.A.

2930 E. Camelback Road

Suite 160

Phoenix, AZ 85016

Direct: (602) 257-0135

Email: bf@federlawpa.com

Gary S. Lincenberg

Ariel A. Neuman

BIRD, MARELLA, BOXER,

 WOLPERT, NESSIM, DROOKS,

 LINCENBERG & RHOW P.C.

Suite 2300

1875 Century Park East

23rd Floor

Los Angeles, CA 90067-2561

Telephone: (310) 201-2100

Email: glincenberg@birdmarella.com

 aneuman@birdmarella.com

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TABLE OF CONTENTS

Page

TABLE OF AUTHORITIES ................................................................................... iv

INTRODUCTION .....................................................................................................1

STATEMENT OF JURISDICTION..........................................................................3

STATUTORY PROVISIONS ...................................................................................4

STATEMENT OF THE ISSUES...............................................................................4

STATEMENT OF THE CASE..................................................................................5

A. History of Backpage.com......................................................................5

B. Backpage.com’s Litigation History. .....................................................7

C. Criminal Prosecution in Arizona...........................................................9

D. Ex Parte Civil Seizures and Forfeiture Actions in California. ...........11

1. U.S. Postal Inspector Lyndon A. Versoza’s Affidavits............12

2. Motion to Vacate or Modify the Seizure Warrants. .................14

E. Additional, Continued Seizures...........................................................16

STANDARD OF REVIEW.....................................................................................19

SUMMARY OF THE ARGUMENT ......................................................................19

ARGUMENT...........................................................................................................23

I. This Court Has Appellate Jurisdiction to Review the District Court’s 

Stay Order......................................................................................................23

A. The Seizures and Stay Are Appealable Injunctions Under 

Section 1292(a)(1)...............................................................................23

B. The Stay Order is Immediately Appealable as a Final Order or 

as an Appealable Collateral Order Because it Effectively 

Forecloses Review on the Merits of Defendants’ Constitutional 

Claims..................................................................................................24

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II. Seizures of Publishing Assets Arising from Operation of 

Backpage.com and from Prior Newspaper Operations Violate the First 

and Fourth Amendments. ..............................................................................28

A. Special Rules Apply When Asset Seizures Implicate First and 

Fourth Amendment Rights..................................................................28

B. The First and Fourth Amendments Prohibit Pre-Conviction 

Seizures of Publishing Assets or Proceeds..........................................33

1. Pretrial Seizure of Publishing Assets is a Prior Restraint.........33

2. Seizure of Publishing Proceeds Penalizes Speech in 

Violation of the First and Fourth Amendments........................37

C. Seizures of Appellants’ Assets Were Defective Because They 

Relied on a Deficient Affidavit, Violated Due Process, and 

Were Grossly Overbroad.....................................................................40

1. Appellants Were Improperly Denied a Prompt Hearing to 

Challenge the Defective Probable Cause Showing. .................41

2. Any Hearing Should Have Required a Heightened 

Showing by the Government. ...................................................44

3. The Seizures Were Grossly Overbroad. ...................................45

III. The District Court’s Stay Order Was Based on a Mistaken Premise 

That Ignored the Constitutional Bases Underlying the Challenge to 

Pretrial Seizures of Publishing Assets...........................................................46

A. The Potential Preclusive Effect That Concerned the District 

Court Does Not Apply in the Context of Appellants’ First and 

Fourth Amendment Challenges to the Government’s Seizures..........48

B. The District Court Erroneously Concluded that Appellants 

Could Seek Effective Relief in the Criminal Proceeding. ..................50

C. The Government’s Gamesmanship Alone is Reason to Deny a 

Stay......................................................................................................52

CONCLUSION........................................................................................................54

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STATEMENT OF RELATED CASES..................................................56

CERTIFICATE OF COMPLIANCE......................................................57

ADDENDUM OF CONSTITUTIONAL AND STATUTORY PROVISIONS....58

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TABLE OF AUTHORITIES

Page(s)

Cases

Abbott v. Perez,

138 S. Ct. 2305 (2018)........................................................................................23

Adult Video Ass’n v. Barr,

960 F.2d 781 (9th Cir. 1992), aff’d in relevant part in

Adult Video Ass’n v. Reno, 41 F.3d 503 (9th Cir. 1994)..................20, 34, 38, 49

Adult Video Ass’n v. Reno,

41 F.3d 503 (9th Cir. 1994) ..............................................................21, 34, 36, 49

Agcaoili v. Gustafson,

870 F.2d 462 (9th Cir. 1989) ..............................................................................23

American Library Ass’n v. Thornburgh,

713 F. Supp. 469 (D.D.C. 1989), rev’d on standing grounds 

sub nom. American Library Ass’n v. Barr, 956 F.2d 1178 

(D.C. Cir. 1992)..................................................................................................37

Ashcroft v. ACLU,

535 U.S. 564 (2002)............................................................................................29

Ashcroft v. Free Speech Coalition,

535 U.S. 234 (2002)............................................................................................30

Backpage.com, LLC v. Cooper,

939 F. Supp. 2d 805 (M.D. Tenn. 2013) ..................................................8, 30, 32

Backpage.com, LLC v. Dart,

807 F.3d 229 (7th Cir. 2015), cert. denied, 137 S. Ct. 46 (2016) ......8, 30, 39, 54

Backpage.com, LLC v. Hoffman,

2013 WL 4502097 (D.N.J. Aug. 26, 2013)....................................................8, 30

Backpage.com, LLC v. McKenna,

881 F. Supp. 2d 1262 (W.D. Wash. 2012) .............................................6, 7, 8, 30

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Bd. of Trs. v. State Univ. of N.J. v. Fox,

492 U.S. 469 (1989)............................................................................................30

Berger v. City of Seattle,

569 F.3d 1029 (9th Cir. 2009) ............................................................................19

Blue Cross & Blue Shield of Ala. v. Unity 

Outpatient Surgery Ctr., Inc.,

490 F.3d 718 (9th Cir. 2007) ..............................................................................25

Brandenburg v. Ohio,

395 U.S. 444 (1969)............................................................................................29

Bruton v. United States,

391 U.S. 123 (1968)............................................................................................35

Center for Democracy & Tech. v. Pappert,

337 F. Supp. 2d 606 (E.D. Pa. 2004)............................................................36, 45

Citizens United v. FEC,

558 U.S. 310 (2010)............................................................................................38

City of Erie v. Pap’s A.M.,

529 U.S. 277 (2000)............................................................................................37

Cohen v. Beneficial Indus. Loan Corp.,

337 U.S. 541 (1949)..................................................................................4, 26, 27

Curran v. Price,

638 A.2d 93 (Md. 1994) .....................................................................................39

Dart v. Craigslist, Inc.,

665 F. Supp. 2d 961 (N.D. Ill. 2009)..............................................................7, 30

Davis v. Walker,

745 F.3d 1303 (9th Cir. 2014) ............................................................3, 24, 25, 26

Doe v. Backpage.com, LLC,

104 F. Supp. 3d 149 (D. Mass. 2015), aff’d, 817 F.3d 12 

(1st Cir. 2016), cert. denied, 137 S. Ct. 622 (2017).......................................8, 30

Elonis v. United States,

135 S. Ct. 2001 (2015)........................................................................................32

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Fort Wayne Books, Inc. v. Indiana,

489 U.S. 63 (1989).......................................................................................passim

Franks v. Delaware,

438 U.S. 154 (1978).....................................................................................passim

Goldberg v. Carey,

601 F.2d 653 (2d Cir. 1979) ...............................................................................23

Hurley v. Irish-American Gay, Lesbian & Bisexual Grp. of Boston,

515 U.S. 557 (1995)............................................................................................19

Keenan v. Superior Court,

40 P.3d 718 (Cal. 2002)......................................................................................39

Lee Art Theatre, Inc. v. Virginia,

392 U.S. 636 (1968)............................................................................................45

Lee v. Illinois,

476 U.S. 530 (1986)............................................................................................35

Lockyer v. Mirant Corp.,

398 F.3d 1098 (9th Cir. 2005) ............................................................................28

Luis v. United States,

136 S. Ct. 1083 (2016)........................................................................................46

M.A. v. Village Voice Media Holdings, LLC,

809 F. Supp. 2d 1041 (E.D. Mo. 2011) ..........................................................8, 30

Marchetti v. Bitterolf,

968 F.2d 963 (9th Cir. 1992) ..............................................................................28

Marcus v. Search Warrant,

367 U.S. 717 (1961)......................................................................................28, 45

Matal v. Tam,

137 S. Ct. 1744 (2017)........................................................................................38

Miami Herald Publ’g Co. v. Tornillo,

418 U.S. 241 (1974)......................................................................................26, 51

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Miller v. California,

413 U.S. 15 (1973)..............................................................................................29

Minneapolis Star & Trib. Co. v. Minnesota Comm’r of Revenue,

460 U.S. 575 (1983)............................................................................................38

Mishkin v. New York,

383 U.S. 502 (1966)............................................................................................32

Moses H. Cone Memorial Hospital v. Mercury Constr. Corp.,

460 U.S. 1 (1983)..........................................................................................24, 25

N.Y. Times Co. v. Sullivan,

376 U.S. 254 (1964)............................................................................................29

State ex rel. Napolitano v. Gravano,

60 P.3d 246 (Ariz. App. Ct. 2002)......................................................................39

National Socialist Party of Am. v. Village of Skokie,

432 U.S. 43 (1977)............................................................................25, 26, 27, 51

Near v. Minnesota,

283 U.S. 697 (1931)............................................................................................37

Omidi v. United States,

851 F.3d 859 (9th Cir. 2017) ..............................................................................50

In re Opinion of Justices to the Senate,

764 N.E.2d 343 (Mass. 2002).............................................................................39

People v. Ferrer,

2016 WL 7237305 (Cal. Super. Ct. Dec. 16, 2016).............................................8

People v. Ferrer,

No. 16FE024013 (Cal. Super. Ct. Aug. 23, 2017) ...............................................8

Philip Morris USA, Inc. v. King Mountain Tobacco Co.,

569 F.3d 932 (9th Cir. 2017) ..............................................................................23

Privitera v. Cal. Bd. of Md. Quality Assurance,

926 F.2d 890 (9th Cir. 1991) ..............................................................................23

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In re Seizure of Account(s) xxxx1889, xxxx2592, 

xxxx1938, xxxx2912, and xxxx2500,

No. 18-CV-06742-RGK-PJW, ECF Nos. 32 & 40 (C.D. Cal. 2018).................14

Seres v. Lerner,

102 P.3d 91 (Nev. 2004).....................................................................................39

Simon & Schuster, Inc. v. Members of New York 

State Crime Victims Board,

502 U.S. 105 (1991).....................................................................................passim

Smith v. California,

361 U.S. 147 (1959)......................................................................................31, 44

Southeastern Promotions, Ltd. v. Conrad,

420 U.S. 546 (1975)............................................................................................44

Spokane Arcades, Inc. v. Brockett,

631 F.2d 135 (9th Cir. 1980), aff’d mem., 454 U.S. 1022 (1981)......................36

Stanford v. Texas,

379 U.S. 476 (1965)......................................................................................28, 45

United States v. $186,416.00 U.S. Currency,

590 F.3d 942 (9th Cir. 2010) ..............................................................................36

United States v. $405,089.23 U.S. Currency,

122 F.3d 1285 (9th Cir. 1997) ............................................................................36

United States v. $52,100 in U.S. Currency,

2018 WL 1782934 (S.D. Cal. Apr. 13, 2018) ....................................................41

United States v. Backpage.com,

No. 18-CR-00465-PHX-SPL, ECF No. 8 (D. Ariz. Apr. 5, 2018)...............10, 17

United States v. Christakis,

238 F.3d 1164 (9th Cir. 2001) ............................................................................42

United States v. Crozier,

777 F.2d 1376 (9th Cir. 1985) ......................................................................41, 54

United States v. DeLeon,

979 F.2d 761 (9th Cir. 1992) ..............................................................................42

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United States v. Ferrer,

No. 18-CR-00464-PHX-SPL, ECF No. 7 (D. Ariz. Apr. 5, 2018)...............10, 16

United States v. Hall,

113 F.3d 157 (9th Cir. 1997) ..............................................................................41

United States v. Liquidators of European Fed. Credit Bank,

630 F.3d 1139 (9th Cir. 2011) .....................................................................passim

United States v. National Treasury Emps. Union,

513 U.S. 454 (1995)............................................................................................38

United States v. One 1978 Piper Cherokee Aircraft,

91 F.3d 1204 (9th Cir. 1996) ..............................................................................36

United States v. One 1987 Mercedes Benz,

1992 WL 198441 (N.D. Ill. Aug. 11, 1992).......................................................41

United States v. P.H.E., Inc.,

965 F.2d 848 (10th Cir. 1992) ................................................................26, 27, 51

United States v. Playboy Entm’t Grp., Inc.,

529 U.S. 803 (2000)......................................................................................30, 38

United States v. Real Prop. Located at 1407 N. Collins,

901 F.3d 268 (5th Cir. 2018) ..............................................................................24

United States v. Ripinsky,

20 F.3d 359 (9th Cir. 1994) ................................................................................24

United States v. Roth,

912 F.2d 1131 (9th Cir. 1990) ............................................................................24

United States v. Sineneng-Smith,

910 F.3d 461 (9th Cir. 2018) ..............................................................................29

United States v. Spilotro,

680 F.2d 612 (9th Cir. 1982) ..............................................................................24

United States v. U.S. Currency $83,310.78,

851 F.2d 1231 (9th Cir. 1988) ............................................................................50

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United States v. Unimex,

991 F.2d 546 (9th Cir. 1993) ..............................................................................50

United States v. Vera,

893 F.3d 689 (9th Cir. 2018) ..............................................................................35

United States v. X-Citement Video, Inc.,

513 U.S. 64 (1994)..............................................................................................32

Vance v. Universal Amusement Co.,

445 U.S. 308 (1980)............................................................................................36

Video Software Dealers Ass’n v. Webster,

968 F.2d 684 (8th Cir. 1992) ..............................................................................32

Virginia v. Black,

538 U.S. 343 (2003)............................................................................................31

Woodhull Freedom Found. v. United States,

334 F. Supp. 3d 185 (D.D.C. 2018),

appeal filed, No. 18-5298 (D.C. Cir. Oct. 12, 2018)....................................44, 45

Constitutional Provisions

U.S. Const.

amend. I........................................................................................................passim

amend. IV.....................................................................................................passim

amend. V......................................................................................................passim

amend. VI.....................................................................................................passim

Statutes

18 U.S.C.

§ 371......................................................................................................................9

§ 981(g)...............................................................................................................46

§ 981(g)(1)..........................................................................................................46

§ 981(g)(2)..........................................................................................................46

§ 1952....................................................................................................................9

§ 1956....................................................................................................................9

§ 1957....................................................................................................................9

§ 1963(d).............................................................................................................38

§ 2255....................................................................................................................8

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28 U.S.C.

§ 1291...........................................................................................................passim

§ 1291(a)(1) ........................................................................................................24

§ 1292(a)(1) .................................................................................................passim

§ 1292(b)(1)........................................................................................................24

Other Authorities

16 C. Wright et al., Federal Practice and Procedure § 3922.3 

(3d ed. 2018).......................................................................................................24

Circuit Rule 28-2.7.....................................................................................................4

Fed. R. Crim. P.

41(e)....................................................................................................................50

41(g)..............................................................................................................15, 50

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INTRODUCTION

This case involves the Government’s abuse of civil forfeiture authority, in 

disregard of rights under the First, Fourth, Fifth, and Sixth Amendments, to 

deprive defendants in a criminal prosecution of assets to fund their defense, and 

subsequent efforts to block defendants from constitutionally challenging the 

Government’s overreaching. At issue is the Government’s use of ex parte

procedures to seize many millions of dollars of publishing assets and proceeds 

from publishing, shuttering the second largest online classified advertising 

platform in the process, and its relentless efforts to prevent the targets of those 

seizures from challenging their legality. The egregiousness of the Government’s 

strategy is heightened by its continuing efforts to seize additional assets as this 

matter is litigated, most recently including millions of dollars held in attorney trust 

accounts needed to fund defense of the unprecedented criminal charges.

The Government has taken advantage of federal law that provides broad 

authority to use criminal and civil processes to seize before trial assets alleged to 

be traceable to criminal conduct, but has done so without informing the courts 

issuing the seizure warrants of the special rules applicable to seizing assets relating 

to activities protected by the First Amendment. Although the Government claims 

the publishing ventures it targeted are not constitutionally protected, that is the 

very point it must prove at trial, as well as before it may seize assets on the theory 

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that all of the third-party content published supposedly pertained to unlawful 

conduct. Not only did the Government conduct multiple rounds of seizures 

without notice or hearing, it did so based on affidavits containing knowingly false 

representations and material omissions, and it seized publishing assets even beyond 

those linked to the business it is prosecuting.

After Appellants challenged the seizures’ legality, the Government’s singleminded focus has been to prevent any court from reviewing the constitutional challenges on the merits, and it has yet to respond to their substance. When Appellants 

filed motions challenging the seizures in the United States District Court for the 

Central District of California (the “CDCA”) (where the seizure warrants were 

issued), the Government argued the challenges should be addressed by the United 

States District Court for the District of Arizona (where the criminal cases are 

pending). Yet when Appellants challenged subsequent seizures in the Arizona 

court, the Government insisted the challenges should be resolved by the California 

court. Thereafter, the Government filed civil forfeiture complaints in California 

corresponding to many of the seizure warrants. It then immediately filed a motion 

ex parte to stay proceedings, including the challenges to the seizures, and the

CDCA granted the stay motion. That stay order—which is the subject of this 

appeal—is the key to the Government’s effort to escape constitutional oversight. 

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From the beginning of the cases that led to this appeal, two things have been 

consistently true: first, the Government has maneuvered to evade any form of 

judicial review (including by this Court) regarding the legal merits of its pretrial 

seizure of millions of dollars of publishing assets and proceeds; and second, 

Appellants have suffered an ongoing deprivation of rights that only this Court can 

correct. The Court should reverse the order granting the stay and instruct the 

District Court to immediately vacate the seizures based on established constitutional rules under the First, Fourth, Fifth, and Sixth Amendments.

STATEMENT OF JURISDICTION

James Larkin, John Brunst, Michael Lacey, and Scott Spear (collectively 

“Appellants”) appeal an order issued in the CDCA staying their constitutional 

challenge to the Government’s ex parte pretrial seizures of publishing assets, and 

proceeds from publishing activities (the “Stay Order”), which froze the seizures in 

place and continued an injunction barring access to those assets. ER 1-2. This 

Court has jurisdiction to hear this appeal under 28 U.S.C. § 1292(a)(1), which confers appellate jurisdiction over orders “granting, continuing, modifying, refusing or 

dissolving injunctions, or refusing to dissolve or modify injunctions.” 28 U.S.C. 

§ 1292(a)(1). This Court also has jurisdiction to hear this appeal under 28 U.S.C. 

§ 1291 because the Stay Order effectively denied Appellants’ constitutional objections and leaves them “out of court.” Davis v. Walker, 745 F.3d 1303, 1308-10 

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(9th Cir. 2014). Finally, this Court has jurisdiction under the Collateral Order 

Doctrine recognized in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541 

(1949). The Court’s jurisdiction over this appeal is discussed in further detail 

below. 

STATUTORY PROVISIONS

Pursuant to Circuit Rule 28-2.7, copies of pertinent constitutional provisions, 

statutes, and regulations appear in the addendum to this brief.

STATEMENT OF THE ISSUES

1. Whether this Court has jurisdiction to review the District Court’s 

order staying this case that has the effect of continuing the injunction against 

Appellants’ access to seized funds, and leaves them no avenue to challenge preemptive, ex parte seizures of publishing assets and proceeds protected by the First 

Amendment.

2. Whether the First and Fourth Amendments bar the Government from 

effecting pretrial ex parte seizures of publishing assets and proceeds of publishing 

activities based on nothing more than a showing of probable cause that the assets 

are linked to criminal activity.

3. Whether ex parte seizures of publishing assets and proceeds of 

publishing activities should be vacated where the affidavits supporting seizure 

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warrants are tainted by material omissions and factual misrepresentations in 

violation of Franks v. Delaware, 438 U.S. 154 (1978).

4. Whether ex parte seizures of publishing assets and proceeds of 

publishing activities should be vacated where the Government failed to initiate a 

prompt hearing on the validity of seizures in which the Government must meet a 

heightened burden of proof.

5. Whether ex parte seizures of publishing assets and proceeds of 

publishing activities should be vacated where a substantial portion of the assets 

seized were derived from earlier publishing ventures not traceable to activities 

alleged to constitute criminal activity. 

6. Whether the District Court erred in staying the proceedings below, 

including Appellants’ challenge to asset seizures, where the failure to promptly 

consider Appellants’ challenge to the seizures deprives Appellants of a remedy for 

violations of their First, Fourth, Fifth, and Sixth Amendment rights.

STATEMENT OF THE CASE

A. History of Backpage.com.

Appellants are former owners of a newspaper conglomerate that, at one time, 

published and distributed 17 weekly newspapers across the country, including the 

Phoenix New Times, SF Weekly, and New York’s Village Voice. Appellants own 

Medalist Holdings, Inc. (“Medalist”), formerly known as New Times, Inc.; Larkin 

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and Lacey own controlling interests, and Brunst and Spear own minority interests. 

Medalist is the parent company of Village Voice Media Holdings, LLC (“VVM”), 

which owned the newspapers.1

 The newspapers featured articles on political and 

cultural issues not typically covered by mainstream media sources, and received 

numerous awards for excellence in journalism, including a Pulitzer Prize. Like 

other alternative weekly publications, the newspapers were free to readers, so they 

depended on advertising revenues, including from classified ads. By the early 

2000s, however, online classified advertising websites, such as Craigslist.org, had 

undermined the economic viability of newspaper classified advertising. 

In response to this trend, VVM formed a subsidiary in 2004, Backpage.com, 

LLC, which launched a website (“Backpage.com”) that published third-party 

classified ads. Categories of advertisements spanned the full spectrum, including 

rentals, automotive, real estate, jobs, dating, and “adult services” ads (including 

escort ads), as had been published in newspapers, yellow pages, and other media 

for decades. See Backpage.com, LLC v. McKenna, 881 F. Supp. 2d 1262, 1282 

(W.D. Wash. 2012) (noting “numerous states license, tax and otherwise regulate 

escort services as legitimate businesses”). Over time, Backpage.com grew to 

become the second largest online classified advertising site in the United States 

(after Craigslist.org), with third-party users posting millions of classified ads each 

 1

 VVM is now known as Camarillo Holdings, LLC.

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month. See id. at 1266. VVM sold its interests in the newspapers in 2013 and its 

interests in Backpage.com, LLC in 2015, both in leveraged buyouts.2

B. Backpage.com’s Litigation History.

As websites like Backpage.com and Craigslist.org gained a greater Internet 

presence, various governmental and non-governmental entities pressured them to 

remove their “adult” advertisements. E.g., Dart v. Craigslist, Inc., 665 F. Supp. 2d 

961 (N.D. Ill. 2009). Backpage.com was unwilling to succumb to censorship, and 

litigation ensued. The Government first investigated prosecuting Backpage.com 

through grand jury proceedings in the United States District Court for the Western 

District of Washington, but its novel prosecution theory of vicarious liability collapsed after an order by Judge Richard Jones quashed its subpoenas as overbroad 

and excessively burdensome. 

Numerous courts have held Backpage.com’s activities were protected under 

the First Amendment, that government authorities may not presume otherwise, and 

that the website and its operators and owners could not be liable under civil or 

criminal laws if some (or even many) individual users utilized the website in 

 2

 Backpage.com, LLC’s then-Chief Executive Officer, Carl Ferrer, purchased 

Backpage.com, through entities he controlled, in April 2015. Medalist, through its 

subsidiaries, holds promissory notes for the balance of the purchase price from 

Ferrer’s entities, and the notes (and other obligations) are secured with liens on 

essentially all assets relating to Backpage.com. The Government’s seizures have 

blocked exercise of those lien rights.

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connection with criminal acts.3 These cases included unsuccessful efforts to 

prosecute the former owners of Backpage.com for purportedly promoting 

prostitution through operation of the website. People v. Ferrer, 2016 WL 7237305 

(Cal. Super. Ct. Dec. 16, 2016), ER 295-309; People v. Ferrer, No. 16FE024013 

(Cal. Super. Ct. Aug. 23, 2017), ER 311-329 (dismissing as to Appellants Lacey 

and Larkin all charges founded on premise that ad revenues from Backpage.com 

represented proceeds of pimping or prostitution). As the Seventh Circuit observed,

Backpage.com is “an avenue of expression of ideas and opinions” protected by the 

First Amendment, including its “classified ads for ‘adult’ services.” Dart, 807 

F.3d at 230-31.

 3

 See M.A. v. Village Voice Media Holdings, LLC, 809 F. Supp. 2d 1041 (E.D. 

Mo. 2011) (dismissing plaintiff’s claims against Backpage.com and finding the 

website could not be found liable under 18 U.S.C. § 2255 for aiding and abetting 

child prostitution); McKenna, 881 F. Supp. 2d 1262 (invalidating Washington law 

seeking to impose criminal liability on Backpage.com and recognizing escort 

advertisements as constitutionally protected speech); Backpage.com, LLC v.

Cooper, 939 F. Supp. 2d 805 (M.D. Tenn. 2013) (same for Tennessee law targeting 

Backpage.com); Backpage.com, LLC v. Hoffman, 2013 WL 4502097 (D.N.J. Aug. 

26, 2013) (same for similar New Jersey law); Doe v. Backpage.com, LLC, 104 

F. Supp. 3d 149 (D. Mass. 2015), aff’d, 817 F.3d 12 (1st Cir. 2016) (dismissing 

plaintiffs’ civil claims and holding practices of website to publish, screen, and edit 

third-party ads did not constitute participation in an illegal venture), cert. denied, 

137 S. Ct. 622 (2017); Backpage.com, LLC v. Dart, 807 F.3d 229, 231 (7th Cir. 

2015) (sheriff’s threats to credit card companies to cause them to cut off services to 

Backpage.com constituted unlawful informal prior restraint under First Amendment), cert. denied, 137 S. Ct. 46 (2016).

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C. Criminal Prosecution in Arizona.

Undeterred by numerous rulings recognizing publication of “adult” advertisements as protected expression under the First Amendment, and emboldened by 

a Senate Permanent Subcommittee on Investigations report vilifying Backpage.com, the Government commenced a prosecution in the District of Arizona 

against various individuals for their involvement with the publisher. On March 28, 

2018, prosecutors obtained a 93-count indictment charging Appellants with 

violations of the Travel Act (18 U.S.C. § 1952), money laundering (18 U.S.C. 

§§ 1956, 1957), and conspiracy (18 U.S.C. § 371), based on their prior involvement with Backpage.com. ER 117-77, 582-642. The Government’s novel theory 

is that website operators may be held criminally liable for content of classified 

advertisements by third parties, even if the operators are responsible neither for the 

content of the ads nor the third parties’ conduct. The Government also charged 

Backpage.com’s current owners (Ferrer, Backpage.com, LLC, and several 

affiliates) in separate, but related, indictments in the District of Arizona. Ferrer 

and his companies pled guilty and Ferrer is cooperating with the government.

On April 6, 2018, the indictment was unsealed, and the Government arrested 

Appellants and searched Lacey’s and Larkin’s homes, seizing computers, jewelry, 

artwork, and other assets (using warrants authorizing the seizure of, among other

things, any “evidence of wealth”). ER 22, 487. At the same time, the Government 

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seized the Backpage.com website, and affiliated websites and domain names, in 

the related prosecution of Backpage.com, LLC.

4

On July 25, 2018, the Government filed a superseding indictment to add 

seven additional counts to the original indictment.5

 The superseding indictment 

contains allegations seeking forfeiture of 26 real properties (some purchased before 

Backpage.com ever existed), 89 bank accounts, and 268 domain names. ER 190-

220, 655-85.6

 Most of the real properties and many of the bank accounts belong to 

Appellants; the balance of assets belongs primarily to Backpage.com, LLC, its 

affiliates, or Ferrer.

 4

 See U.S. Department of Justice Press Release, Apr. 9, 2018, 

https://www.justice.gov/opa/pr/justice-department-leads-effort-seize-backpagecom 

-internet-s-leading-forum-prostitution-ads. In connection with the seizures, Ferrer, 

the website’s former CEO and owner, pled guilty to one count of conspiracy, 

Minute Entry of Change of Plea Hearing, United States v. Ferrer, No. 18-CR00464-PHX-SPL, ECF No. 7 (D. Ariz. Apr. 5, 2018), as did Backpage.com, LLC 

and certain affiliates to one count of money laundering. Minute Entry of Change 

of Plea Hearing, United States v. Backpage.com, No. 18-CR-00465-PHX-SPL, 

ECF No. 8 (D. Ariz. Apr. 5, 2018). 

5

 At the same time, Appellants Larkin and Lacey are forced to defend against a 

criminal prosecution brought by the State of California (which has claimed to have 

been engaged in a “joint law enforcement effort” with the Government), other state 

criminal investigations, and civil litigation in numerous states.

6

 The assets named in the forfeiture allegations were already seized or otherwise encumbered in the civil actions described below. 

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D. Ex Parte Civil Seizures and Forfeiture Actions in California.

On a separate but parallel track in the CDCA, the Government effected 

multiple pretrial seizures of Appellants’ assets. On March 28, 2018, it obtained ex 

parte civil seizure warrants authorizing it to seize millions of dollars of assets 

belonging to Appellants and their family members, as well as funds held in a bank 

account of Cereus Properties, LLC (“Cereus”), an entity owned by Appellants.7

The Government continued with several additional waves of seizures, 

including by obtaining additional ex parte seizure warrants in the CDCA on 

April 4, 9, and 26, June 4, and July 27, 2018, authorizing it to seize additional 

financial accounts of Appellants, their families, and Cereus. All told, the 

Government obtained at least 24 civil seizure warrants, through which it seized 

many millions of dollars from Appellants Lacey, Larkin, Brunst, and Spear, and 

millions more from Cereus. The Government also obtained lis pendens on all real 

properties in which Appellants hold interests. See ER 19-20, 484-85. 

Nearly all of the seized assets were derived from Appellants’ publishing 

activities, including assets earned from decades of operation of the newspapers, 

long before the creation of Backpage.com. ER 24, 489. In particular, Lacey and 

Larkin earned millions of dollars from operation of the newspapers. Id. These 

 7

 Cereus is a subsidiary of Medalist. Among other things, Cereus has managed 

real property it controlled and collected payments on promissory notes from the 

sale of VVM’s newspapers and from the sale of Backpage.com. 

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assets were seized without any prior notice, adversary hearing, or opportunity to be 

heard. 

1. U.S. Postal Inspector Lyndon A. Versoza’s Affidavits.

Each of the ex parte applications for seizure warrants for Appellants’ assets 

included an affidavit from U.S. Postal Inspector Lyndon A. Versoza. ER 61-116, 

526-81. The affidavits, which are essentially identical, state that Inspector Versoza 

sought pretrial restraint of Appellants’ assets under the typical probable-cause 

standard, and made no attempt to satisfy the heightened burdens associated with 

seizures of assets derived from participation in activities protected by the First 

Amendment, such as publishing. 

In substance, the Versoza affidavits base their assertions of probable cause 

on: (1) accusations by Government officials and politicians that Backpage.com 

hosted third-party content relating to unlawful activities; (2) his opinion that most 

ads posted by third parties to Backpage.com related to prostitution or sex 

trafficking, based on prosecution of a small number of third parties who posted on 

the website; (3) mischaracterizations of email exchanged internally at Backpage.com by, among other things, omitting text that dramatically altered the 

email’s meaning; and (4) his personal observations in which he claimed that 

general “training and experience” enabled him to determine that words or phrases 

in advertisements that did not on their face propose unlawful transactions were 

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nonetheless “consistent with sex trafficking.” ER 83-96, 548-61; see also ER 32-

40, 497-505. 

The Versoza affidavits were silent on three pieces of information critical to 

whether the Government had a basis for its claims: (1) courts had uniformly 

recognized that operation of Backpage.com, a website that allowed third parties to 

post content, was lawful because classified advertisements, even “adult” ads, 

constituted protected expression; (2) mere presence of third-party ads related to 

unlawful conduct on Backpage.com was inadequate to establish mens rea for 

Appellants as publishers—that would require evidence that Appellants were aware 

of the content of specific ads, knew the content of those specific ads related to 

unlawful activities, and published those specific ads with the intent to facilitate 

those specific unlawful activities; and (3) Backpage.com had extensively 

cooperated with law enforcement, resulting in numerous commendations from 

federal and state law enforcement, including from the Department of Justice.8

 

Versoza’s factually and legally incomplete, and misleading, affidavits led to ex 

parte authorization of the Government’s seizure of nearly all of Appellants’ assets. 

No hearing was ever held to allow Appellants to challenge Versoza’s allegations.

 8

 Versoza not only failed to inform the Magistrate Judges of Backpage.com’s 

extensive cooperation with law enforcement, but premised his allegation that 

Backpage.com knew of and intended to facilitate unlawful conduct by third parties 

posting ads on its cooperation with law enforcement investigations and 

prosecutions. 

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2. Motion to Vacate or Modify the Seizure Warrants.

After obtaining the seizure warrant applications, Appellants filed a Motion 

to Vacate or Modify the Seizure Warrants (“Motion to Vacate”) on August 1, 2018 

asserting that the warrants violated the First, Fourth, Fifth, and Sixth Amendments. 

ER 3-56, 469-521. Appellants explained that: (1) the warrants should be vacated 

and the seized assets returned because the First and Fourth Amendments bar preconviction seizures of publishing assets or proceeds; (2) Appellants in any event 

should have been accorded a right to a prompt adversarial hearing at which the 

Government must meet a heightened standard of proof beyond probable cause; 

(3) the warrants violated the Fourth Amendment and should be vacated because 

they were obtained through knowing or recklessly false statements and material 

omissions, in violation of Franks v. Delaware; and (4) even without regard to the 

First and Fourth Amendments, the seizures were markedly over-inclusive in 

violation of Appellants’ Fifth and Sixth Amendment rights. ER 23-53, 488-518. 

The Government never responded to the merits of Appellants’ Motion to 

Vacate. Instead, after twice seeking and receiving extensions of time from the 

CDCA,9 the Government filed an “application” in the criminal prosecution 

pending in the District of Arizona seeking an order from that court “directing that 

 9

 In re Seizure of Account(s) xxxx1889, xxxx2592, xxxx1938, xxxx2912, and 

xxxx2500, No. 18-CV-06742-RGK-PJW, ECF Nos. 32 & 40 (C.D. Cal. 2018).

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the United States may maintain custody of the seized assets.” Appellants’ Motion 

for Judicial Notice (hereinafter cited as “RJN”) at Exhibit A, RJN 9. The 

“application” did not inform the District of Arizona judge about the Motion to 

Vacate pending in the CDCA. RJN 2-9. Once informed of the Motion to Vacate, 

the District of Arizona judge declined to rule on the Government’s requested relief. 

RJN 11-16, 18-19.

Back in the CDCA, the Government again sought leave to extend the 

deadline to respond to the Motion to Vacate, but eventually filed an “Opposition” 

in which it argued the Motion to Vacate should have been filed in the District of 

Arizona as a motion for return of property under Fed. R. Crim. P. Rule 41(g). ER 

385-94. This nominal response did not address Appellants’ constitutional grounds 

for vacating the seizures. 

While the Motion to Vacate was pending, the Government filed civil 

forfeiture complaints in the CDCA for assets previously seized under the 

challenged seizure warrants, as well as other property. All of these forfeiture 

complaint cases were later related to the case in which Appellants’ filed the Motion 

to Vacate. See ER 456. 

The Government then filed an ex parte application to stay all proceedings in 

the cases, contending (among other things) that Appellants would not be prejudiced because they “may pursue a similar remedy in the Arizona criminal matter.” 

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ER 432-37 (asserting that Appellants’ concerns are “more properly” addressed in 

“the Arizona criminal matter”). On October 23, 2018, Judge Klausner of the 

CDCA stayed the proceedings below, including Appellants’ challenge to the 

seizures. ER 1-2. In so doing, Judge Klausner stated that “the Court sees no 

reason why Movants’ pending motions could not be brought in the criminal 

action.” Id. at 2. This appeal followed. ER 449-455. 

E. Additional, Continued Seizures.

The Government’s unchecked, aggressive and infirm seizures have 

continued. One week after the Motion to Vacate (premised heavily on the First 

Amendment), the Government seized trust funds held by Appellants’ First 

Amendment counsel, Davis Wright Tremaine.10 Approximately three months 

later, and one week after issuance of the Stay Order, the Government sought and 

obtained at least twelve new ex parte seizure warrants authorizing it to seize funds 

held in bank accounts of 18 other law firms,11 plus those in four trusts for the 

 10 Court documents pertaining to these seizures are sealed but can be provided 

to the Court in a sealed submission upon request.

11 The Government took this step despite previous assurances made to certain 

Appellants’ counsel that it would not seek to seize funds held in attorney trust 

accounts for the representation of defendants in criminal cases and related matters. 

Notably, however, the Government’s plea agreements with Ferrer and 

Backpage.com, LLC allow their counsel to keep and use retainer funds they hold. 

See Prelim. Order of Forfeiture at 12-13, United States v. Ferrer, No. 18-CR00464 PHX-SPL, ECF No. 23 (D. Ariz. Apr. 9, 2018); Prelim. Order of Forfeiture 

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benefit of Larkin’s children. See Appellants’ Motion to Submit Sealed Documents 

for Judicial Notice (hereinafter cited as “RJN”) at Exhibit L, RJN 101-25, 

175-82.12 

The Government’s warrant applications included affidavits from Inspector 

Versoza identical in all material respects to his prior affidavits used to support the 

first round of seizures. RJN 167-234. They neither mention the Motion to Vacate, 

nor acknowledge or correct the numerous factual and legal shortcomings identified 

in the Motion to Vacate. Id.

13

After obtaining seizure warrants for attorney trust funds ex parte, the 

Government contacted law firms holding funds subject to the warrants to offer the 

“option” of turning over trust account funds “in lieu of” execution of warrants on 

the firms’ respective banks. RJN 116-18. When Appellants learned of this, they 

sought emergency stays of execution of the warrants in the District of Arizona, 

 

at 17-18, 23, United States v. Backpage.com, No. 18-CR-00465-PHX-SPL, ECF 

No. 22 (D. Ariz. Apr. 9, 2018). 

12 The Government obtained ex parte seizure warrants in the CDCA in twelve 

cases, and Appellants filed Applications to Stay Execution of Seizure Warrants in 

eight of these cases: 18-MJ-2782, 18-MJ-2783, 18-MJ-2784, 18-MJ-2785, 18-MJ2786, 18-MJ-2788, 18-MJ-2880, and 18-MJ-2883 (C.D. Cal. 2018). The ensuing 

litigation and pleadings in all eight cases are substantively identical. Thus, only 

pleadings from 18-MJ-2785 are included in the RJN and cited herein. See RJN 

101-266.

13 The more recent Versoza affidavits are materially identical to prior 

affidavits. Compare ER 62-116, with ER 527-81. 

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challenging the seizure warrants on First, Fourth, Fifth, and Sixth Amendment 

grounds. RJN 21-28, 33-67, 69-71, 88-93. The Arizona federal court granted 

temporary stays and held a hearing on November 16, 2018. See, e.g., RJN 30-31, 

95-96. In this litigation, much like that on the Motion to Vacate in the CDCA, the 

Government did not respond substantively to Appellants’ constitutional challenges. 

Instead, it claimed there was no reason for the District of Arizona to address the 

merits of those challenges because Appellants should have pursued them in the 

CDCA. RJN 76 (“To the extent that Movants have any basis to contest the Seizure 

Warrants, such motions should have been filed in the Central District of California, 

where the warrants [] issued.”). In a ruling announced at the November 16, 2018 

hearing, the Arizona District Court was persuaded by the Government and declined 

to entertain Appellants’ constitutional challenges on the basis that they should be 

heard by the issuing Magistrate in the CDCA. RJN 98-99.

Appellants then filed applications in the CDCA before the issuing 

Magistrate similarly seeking to stay execution of the seizure warrants based on 

their constitutional infirmities, including violations of the First, Fourth, Fifth, and 

Sixth Amendments. RJN 101-25. Yet again, the Government did not engage with 

the merits, but instead offered in its response only procedural reasons for denying

relief. ER 236-41. The matters raised in those motions are now fully submitted, 

and remain pending (but the additional seizures are not at issue here, see infra note 

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31, though the Court can consider this subsequent Government conduct in assessing the seizure warrants at issue here).

STANDARD OF REVIEW

This Court reviews de novo all questions of law, statutory interpretations, 

interpretations of the Federal Rules of Criminal Procedure, and questions of res 

judicata. United States v. Liquidators of European Fed. Credit Bank, 630 F.3d 

1139, 1144 (9th Cir. 2011). Also, in appeals concerning First Amendment issues,

this Court “conduct[s] an independent review of the facts.” Berger v. City of 

Seattle, 569 F.3d 1029, 1035, 1041 (9th Cir. 2009); see also Hurley v. IrishAmerican Gay, Lesbian & Bisexual Grp. of Boston, 515 U.S. 557, 567 (1995) 

(court has “constitutional duty to conduct an independent examination of the 

record as a whole, without deference to the trial court ... because the reaches of the 

First Amendment are ultimately defined by the facts”).

SUMMARY OF THE ARGUMENT

The Government tries to treat this case as a routine matter, where it can use 

civil forfeiture procedures to seize and hold assets subject to criminal forfeiture 

pending conclusion of a related criminal trial. See generally Government’s Reply 

to Movants’ Resp. to Order to Show Cause, ECF No. 10-1 (9th Cir. filed Nov. 30, 

2018). But this is not a routine case. The Government’s seizures of assets that 

were the subject of Appellants’ motion below were derived from Appellants’ 

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activities as publishers. They include assets earned from decades in the newspaper 

publishing business before Backpage.com was created, as well as assets derived 

from operation of Backpage.com that are presumptively protected by the First 

Amendment. For that reason, the seizures cannot be treated like those for assets 

derived from crimes that have nothing to do with expression, such as drugs, arson, 

or murder. Adult Video Ass’n v. Barr, 960 F.2d 781, 792 (9th Cir. 1992), aff’d in 

relevant part in Adult Video Ass’n v. Reno, 41 F.3d 503 (9th Cir. 1994).

The District Court’s stay has the effect of continuing orders that seize or 

restrain assets that are appealable as injunctions under 28 U.SC. § 1292(a)(1), 

which confers appellate jurisdiction. Even if that were not the case, this Court has 

recognized the ability to immediately appeal under Section 1291 where the grant of 

a stay leaves a party “effectively out of court,” as would result if the constitutionality of pre-trial seizures of presumptively First Amendment-protected assets 

based solely on probable cause must await conclusion of the criminal case. 

Additionally, this Court has jurisdiction under the Collateral Order Doctrine.

Special rules govern seizures of publishing assets and proceeds of First 

Amendment-related activity, which the Government seeks to avoid by assuming 

they do not apply here, on the theory that all postings on Backpage.com were 

unprotected by the First Amendment. This position has numerous flaws, beginning 

with how the First and Fourth Amendments place the burden firmly on the GovernCase 2:18-cr-00422-DJH Document 507-2 Filed 03/20/19 Page 34 of 77 Case: 18-56455, 02/06/2019, ID: 11181873, DktEntry: 28, Page 33 of 76
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ment to prove speech is unprotected, as well as to establish the requisite mens rea, 

before it may effect such a seizure. The Government thus has it backwards—

claiming the seizures present no constitutional problem because of its assumptions 

about the unprotected nature of the speech at issue. These constitutional 

presumptions apply both to expressive assets and the proceeds of publishing, and 

the Government cannot overcome them by assuming what it has the burden to 

prove before effecting the seizures.

The affidavits purporting to establish probable cause that postings on 

Backpage.com were linked to illegal transactions fall far short of the required 

showing. As established in such cases as Fort Wayne Books, Inc. v. Indiana, 489 

U.S. 63 (1989), Reno, 41 F.3d at 503, and Simon & Schuster, Inc. v. Members of 

New York State Crime Victims Board, 502 U.S. 105 (1991), mere probable cause is 

insufficient to justify pretrial seizures of publishing assets or proceeds. Yet, even 

if probable cause were the correct standard, the showing here is woefully deficient, 

as it relies on averments that the Government was fully aware contained material 

misrepresentations and omissions, in violation of Franks v. Delaware. Appellants 

should have been accorded an immediate hearing in which the Government had the 

burden of proof under a heightened standard. Because those procedural and 

substantive rights were denied, the seizures should be vacated and Appellants’ 

assets returned. In addition, the Government seized substantial publishing assets 

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that were unrelated to the operation of Backpage.com, and the seizures, therefore, 

were grossly overbroad. These seizures should be immediately vacated as well.

The District Court’s decision staying proceedings below is incorrect as a 

matter of law and has the effect of depriving Appellants a remedy for the serious 

constitutional violations at issue. The District Court erroneously held it should 

stay proceedings based on the incorrect assumption that a ruling on the legality of 

pretrial seizures of publishing assets would be res judicata for post-conviction 

forfeitures. As Fort Wayne Books and Simon & Schuster make clear, however, 

pre- and post-trial seizures of publishing assets present different constitutional 

issues; a ruling on pre-trial civil seizures does not preclude post-conviction 

criminal forfeiture, if properly pursued and proven.

More importantly, the stay was erroneous because it denies Appellants any 

possible constitutional remedy for the Government’s pretrial seizure of publishing 

assets. Where the constitutional violation arises from seizing prior to trial assets 

and proceeds that are presumptively protected, the District Court’s assumption that 

Appellants’ rights may be vindicated after trial is patently illogical. It plays into 

the Government’s shell game of seizing assets without justification, then using 

procedural dodges to avoid ever having to provide a substantive defense of its 

actions. This Court has held such tactics are illegitimate and constitute grounds for 

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vacating a seizure. Liquidators of European Fed. Credit Bank, 630 F.3d at 

1147-53.

ARGUMENT

I. This Court Has Appellate Jurisdiction to Review the District Court’s 

Stay Order.

A. The Seizures and Stay Are Appealable Injunctions Under Section 

1292(a)(1).

This Court has jurisdiction to hear this appeal under 28 U.S.C. § 1292(a)(1), 

which confers appellate jurisdiction over orders “granting, continuing, modifying, 

refusing or dissolving injunctions.” 28 U.S.C. § 1292(a)(1). In deciding if an 

order is an appealable injunction under Section 1292(a)(1), courts look to the 

“practical effect” of the order, not whether the district court labeled it an 

“injunction.” Abbott v. Perez, 138 S. Ct. 2305, 2318 (2018). In this case, the 

district court’s Order staying this action has the effect of continuing the injunction 

restraining Appellants’ assets in place, and is thus appealable under the plain 

language of Section 1292(a)(1).

Numerous Ninth Circuit cases hold that denial of injunctive relief followed 

by a stay is appealable under Section 1292(a)(1). See, e.g., Philip Morris USA, 

Inc. v. King Mountain Tobacco Co., 569 F.3d 932 (9th Cir. 2017); Privitera v. Cal. 

Bd. of Md. Quality Assurance, 926 F.2d 890 (9th Cir. 1991); Agcaoili v. Gustafson,

870 F.2d 462 (9th Cir. 1989). Other circuits are in accord. See, e.g., Goldberg v. 

Carey, 601 F.2d 653 (2d Cir. 1979). This Court also has held that orders 

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restraining assets are appealable as injunctions under Section 1292(a)(1). See 

United States v. Ripinsky, 20 F.3d 359, 361 (9th Cir. 1994); United States v. Roth,

912 F.2d 1131, 1133 (9th Cir. 1990); see also United States v. Spilotro, 680 F.2d 

612, 615 (9th Cir. 1982) (finding jurisdiction over order restraining assets pending 

resolution of related criminal charges because “denial of interlocutory review 

might cause [] defendants’ rights to be irreparably lost or impaired”).14 The stay 

order below freezes the asset seizure orders in place and is thus immediately 

appealable under 28 U.S.C. § 1291(a)(1).

B. The Stay Order is Immediately Appealable as a Final Order or as 

an Appealable Collateral Order Because it Effectively Forecloses 

Review on the Merits of Defendants’ Constitutional Claims.

Even if the Stay Order were not immediately appealable as an interlocutory 

order under Section 1292(b)(1), it is an appealable final order under Section 1291 

because it effectively decides the substance of this case and leaves Appellants 

“effectively out of court.” Davis, 745 F.3d at 1308-10. 

The Supreme Court established this principle in Moses H. Cone Memorial 

Hospital v. Mercury Construction Corp., 460 U.S. 1, 7 (1983), where a contractor 

 14 Other circuits agree. See, e.g., United States v. Real Prop. Located at 1407 

N. Collins, 901 F.3d 268, 272 (5th Cir. 2018). See also 16 C. Wright et al., Federal 

Practice and Procedure § 3922.3, at 135-36 (3d ed. 2018) (“Orders controlling the 

use of property involved in forfeiture proceedings have been held [immediately] 

appealable, no doubt in part because of the drastic consequence threatened by 

modern uses of forfeiture.”).

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sued in federal court to compel arbitration in response to a hospital’s state claim

seeking a declaration that the parties’ contract granted no right to arbitration. The 

district court stayed the federal case pending resolution of the arbitration question 

in state court, but the Supreme Court concluded that the district court’s stay order 

was immediately appealable under Section 1291 because it effectively amounted to 

a final order for purposes of jurisdiction. Id. at 9. Because the state court proceedings would have mooted the federal case and left plaintiff “effectively out of 

court,” the stay order was immediately appealable. Id.

This Court, following a majority of other circuits, extended the Moses H. 

Cone Doctrine to allow immediate appeal of a stay order that “impose[s] lengthy or 

indefinite delays.” Blue Cross & Blue Shield of Ala. v. Unity Outpatient Surgery 

Ctr., Inc., 490 F.3d 718, 723 (9th Cir. 2007) (discovery in civil case implicated 

defendants’ Fifth Amendment rights, and delay left them effectively out of court). 

This is particularly a problem when protection of civil liberties is at stake. Davis, 

745 F.3d at 1309 (stay order was immediately appealable to allow state prisoner’s 

claims to go forward regarding involuntary medication and abuse, because lengthy 

and indefinite delays would leave plaintiff “effectively out of court”). Where First 

Amendment rights are implicated, as they are here, courts have held repeatedly that 

immediate appeal of stay orders is required to prevent ongoing burdens to constitutional protections for free expression. E.g., National Socialist Party of Am. v. 

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Village of Skokie, 432 U.S. 43 (1977) (per curiam); United States v. P.H.E., Inc., 

965 F.2d 848, 857 (10th Cir. 1992). See Fort Wayne Books, 489 U.S. at 56 (“it 

would be intolerable to leave unanswered, under these circumstances, an important 

question of freedom of the press under the First Amendment”). See also Miami 

Herald Publ’g Co. v. Tornillo, 418 U.S. 241, 246-47 & n.6 (1974) (same).

That is precisely Appellants’ situation. Their Motion to Vacate in the 

CDCA has been stayed, and the District Court in Arizona refused to assert

jurisdiction over their constitutional challenge to the pretrial seizures. [Tr. of 

Record at 55:1-60:3, Nov. 16, 2018 Hearing, D. Ariz. 18-CR-00422]. Therefore, 

the challenge will not be heard until after the criminal trial, at which point the 

primary claims (that First Amendment proceeds cannot be seized before trial and 

Appellants have a Fifth Amendment right to a prompt hearing) will be moot.

Even if the Stay Order is not deemed a “final order” for purposes of 28 

U.S.C. § 1291, it is appealable as a “collateral order” under Cohen v. Beneficial 

Industrial Loan Corp., 337 U.S. 541 (1949). The Collateral Order Doctrine 

recognizes “that § 1291’s reference to ‘final decisions’ includes certain interlocutory orders that ‘finally determine claims of right separable from, and 

collateral to, rights asserted in the action[.]” Davis, 745 F.3d at 1308 (citing 

Cohen, 337 U.S. at 546). 

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The Collateral Order Doctrine often has been cited as a reason to allow 

immediate appeals in cases involving First Amendment rights. In Village of 

Skokie, for example, the Supreme Court found refusal to stay an injunction 

immediately appealable under Cohen because denial of First Amendment rights 

was “separable from, and collateral to” the merits, and failure to take jurisdiction 

would ignore the “strict procedural safeguards” required in free speech matters, 

“including immediate appellate review.” 432 U.S. at 44. Similarly, the Tenth 

Circuit in P.H.E., Inc. held the Collateral Order Doctrine applied where it found 

the district court’s order implicated “important right[s] which would be lost, 

probably irreparably, if review had to await final judgment.” P.H.E., 965 F.2d at 

855, 856 (citation and internal quotation marks omitted). 

The Stay Order here is appealable under the same reasoning. First, it conclusively determines disputed questions in the forfeiture proceeding in the District 

Court including (1) the constitutionality of seizing publishing proceeds before trial 

and (2) Appellants’ right to a prompt hearing. The stay renders those constitutional violations a fait accompli. Second, the order stayed the CDCA proceedings 

because of supposed res judicata effects on the Arizona criminal case, even though 

later criminal forfeiture is a separate issue from the Government’s present unconstitutional civil forfeitures. Third, the Stay Order will be unreviewable if not 

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tionality of pretrial seizures of publishing proceeds and violation of Appellants’ 

rights to a prompt hearing. Appeal of those issues after trial, years in the future, 

would be pointless. See Lockyer v. Mirant Corp., 398 F.3d 1098, 1104 (9th Cir. 

2005) (citing Marchetti v. Bitterolf, 968 F.2d 963, 966 (9th Cir. 1992) (unreviewability factor met where it was likely that case would be mooted)).

II. Seizures of Publishing Assets Arising from Operation of Backpage.com 

and from Prior Newspaper Operations Violate the First and Fourth 

Amendments.

A. Special Rules Apply When Asset Seizures Implicate First and 

Fourth Amendment Rights.

Any pretrial seizure of expressive materials and related assets requires 

“special protection.” Fort Wayne Books, 489 U.S. at 63. See Stanford v. Texas, 

379 U.S. 476, 486 (1965) (“The point is that it was not any contraband of that kind 

which was ordered to be seized, but literary material.”). This requirement is due to 

the fact that development of Fourth Amendment protections against unreasonable 

searches and seizures “is largely a history of conflict between the Crown and the 

press.” Id. at 482. The Supreme Court has long recognized that the government 

used “the power of search and seizure as an adjunct to a system for the suppression 

of objectionable publications.” Marcus v. Search Warrant, 367 U.S. 717, 724 

(1961). Consequently, the Government’s authority to effect a seizure of assets tied 

to publishing is limited by both the First and Fourth Amendments. Id. at 730-32.

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The Government’s claim that this case raises no First Amendment issues, 

based on allegations that Backpage.com hosted only speech relating to unlawful 

activities, is wrong for multiple reasons, not least of which is that it assumes what 

the Government has the burden to prove—that all proceeds from Backpage.com 

constitute profits from unprotected speech, that Appellants had specific knowledge 

and intent regarding its unprotected status, and that all of the assets seized came 

only from that source. Each of these errors is addressed in turn below, but the 

threshold problem is the Government’s refusal to understand that it must prove the 

speech (and proceeds derived therefrom) is unprotected by the First Amendment, 

as well as the requisite mens rea, before it may take action against the speech.

No doubt, certain narrowly framed and specifically defined categories of 

speech are considered outside the First Amendment’s protection. United States v. 

Sineneng-Smith, 910 F.3d 461, 470 (9th Cir. 2018). But speech is presumed 

protected, Ashcroft v. ACLU, 535 U.S. 564, 573 (2002), and before it may be 

relegated to one of these unprotected categories, the Constitution erects high 

barriers and imposes the burden of proof on the Government.15 These limits are 

 15 E.g., N.Y. Times Co. v. Sullivan, 376 U.S. 254, 279-80 (1964) (public 

officials must prove falsity of speech and actual malice to recover damages for 

defamation); Miller v. California, 413 U.S. 15, 23-25 (1973) (government must 

show that work, taken as a whole, meets three-part test to be considered obscene); 

Brandenburg v. Ohio, 395 U.S. 444, 447-49 (1969) (government must prove that 

speaker intended to provoke commission of crime and that speech was likely to 

produce imminent crime to be considered incitement).

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strictly enforced. “The government may not suppress lawful speech as a means to 

suppress unlawful speech. Protected speech does not become unprotected merely 

because it resembles the latter. The Constitution requires the reverse.” Ashcroft v. 

Free Speech Coalition, 535 U.S. 234, 255 (2002).16 

More specifically, the First Amendment prohibits the Government from 

declaring online classified ads for adult services or escorts are unprotected simply 

because a Government investigator believes that they “look like” ads for illegal 

prostitution. Dart, 807 F.3d at 234 (“[N]ot all advertisements for sex are advertisements for illegal sex.”). Yet that is the mistaken premise upon which the asset 

seizure warrants were issued in this case, despite the fact that every court to 

address this question has held the Government cannot presume adult-oriented ads 

are unprotected.

17

 16 See United States v. Playboy Entm’t Grp., Inc., 529 U.S. 803, 816 (2000) 

(“When the Government restricts speech, [it] bears the burden of proving the 

constitutionality of its actions.”); id. at 818 (“When First Amendment compliance 

is the point to be proved, the risk of nonpersuasion ... must rest with the Government, not with the citizen.”); Bd. of Trs. v. State Univ. of N.J. v. Fox, 492 U.S. 469, 

480 (1989) (“the State bears the burden of justifying its restrictions”).

17 See, e.g., Doe v. Backpage.com LLC, 104 F. Supp. 3d at 156-57 (“The 

existence of an escorts section in a classified ad service, whatever its social merits, 

is not illegal.”), aff’d, 817 F.3d 12; McKenna, 881 F. Supp. at 1282 (discussing 

permissibility of escort ads and state licensure of escort services); Cooper, 939 

F. Supp. 2d at 816, 833-34 (ads on Backpage.com are protected speech under the 

First Amendment); Hoffman, 2013 WL 4502097, at *9-11 (rejecting argument that 

escort ads on website are unprotected speech); M.A., 809 F. Supp. 2d at 1049-50. 

See also Dart v. Craigslist, 665 F. Supp. 2d at 968 (“We disagree ... that the ‘adult 

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The Government faces an even higher hurdle in this case. The allegations 

in the criminal case underlying the civil seizures here are not that Appellants 

authored advertisements proposing illegal transactions, or even that they were 

aware of the content of specific ads (much less that they knew the content of 

those specific ads related to unlawful activities, and published those specific ads 

with the intent to facilitate the specific unlawful activities). Rather, the Government alleges Appellants once owned (or worked for) a company that published a 

website that hosted third-party speech, and thereby “facilitated” illegal transactions by unrelated third parties. In this circumstance, the First Amendment 

prohibits the Government from presuming the requisite knowledge or intent. 

E.g., Virginia v. Black, 538 U.S. 343, 364-65 (2003).

The Supreme Court has long held the Government cannot impose liability 

for distributing expressive materials without sufficient proof of scienter. In Smith 

v. California, 361 U.S. 147 (1959), it struck down a Los Angeles ordinance 

making it a crime for booksellers to possess obscene books. Even though the First

Amendment does not protect obscene speech, the Court held a bookseller could not 

be held liable without proof of knowledge concerning the contents of a given book. 

Id. at 153-54 (“It would be altogether unreasonable to demand so near an approach 

 

services’ section is a special case. The phrase ‘adult,’ even in conjunction with 

‘services,’ is not unlawful in itself nor does it necessarily call for unlawful 

content.”).

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to omniscience. And the bookseller’s burden would become the public’s burden.”). See Mishkin v. New York, 383 U.S. 502, 511 (1966) (“The Constitution 

requires proof of scienter to avoid the hazard of self-censorship of constitutionally 

protected material ....”).18 The First Amendment burden imposed by selfcensorship is magnified online, because “websites ... will bear an impossible 

burden to review all of their millions of postings or, more likely, shut down their 

adult services entirely.” Cooper, 939 F. Supp. 2d at 830. Thus, in the context of a 

publisher of a website hosting third-party classified ads, the Government must 

prove scienter as to each ad that it claims relates to unlawful conduct.

In this case, the asset seizures were based on no more than allegations of 

generalized knowledge about the overall “nature” of the website and that 

advertisements had led to unlawful conduct (which authorities investigated with 

Backpage.com’s help and support).19 These conclusions were based on the obser-

 18 See also United States v. X-Citement Video, Inc., 513 U.S. 64, 78 (1994) (“a 

statute completely bereft of a scienter requirement as to the age of the performers 

would raise serious constitutional doubts”); Video Software Dealers Ass’n v. 

Webster, 968 F.2d 684, 690 (8th Cir. 1992) (“Statutes that impose criminal 

responsibility for dissemination of unprotected speech must contain a knowledge 

requirement.”); Elonis v. United States, 135 S. Ct. 2001, 2009 (2015) (“[W]rongdoing must be conscious to be criminal.”).

19 For example, Inspector Versoza based his conclusions on his estimate that 

90 percent of Backpage.com’s revenues “are generated from ‘adult’ and ‘escort’ 

ads,” ER 65, 530, but failed to disclose that numerous courts have rejected 

arguments equating ads in these categories with ads for illegal prostitution. See 

supra 7-8 & n.3, 30 & n.17. 

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vations of a single postal inspector. None of the “special protections” governing 

seizures affecting First Amendment interests were observed. It was the Government’s burden to justify the seizures in light of the First and Fourth Amendment 

concerns that Appellants raised. Failure to meet that burden means the decision 

below is erroneous and the seizures must be vacated.

B. The First and Fourth Amendments Prohibit Pre-Conviction 

Seizures of Publishing Assets or Proceeds.

The general First and Fourth Amendment rules that limit Government power 

have long been applied to restrict the ability to seize publishing assets and 

proceeds. The District Court did not address the merits of Appellants’ Motion to 

Vacate on this point, and thus far the Government has used various procedural 

dodges to avoid engaging on this issue. The applicable law is clear, however.

1. Pretrial Seizure of Publishing Assets is a Prior Restraint.

The essential rationale underlying the seizure warrants that the Government 

obtained is constitutionally infirm. In Fort Wayne Books, 489 U.S. at 51, the 

Supreme Court invalidated a section of the Indiana RICO law that authorized 

pretrial seizures of assets “subject to forfeiture” on a showing of probable cause.20 

The State had obtained a forfeiture order under the law, and the sheriff had seized 

 20 Assets “subject to forfeiture” under the Indiana law included all “property, 

real and personal, that ‘was used in the course of, intended for use in the course of, 

derived from, or realized through’ ... racketeering activity.” Fort Wayne Books, 

489 U.S. at 51.

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defendants’ real estate, publications, and other personal property, padlocking three 

adult bookstores and hauling away their contents. Id. at 52. The Court held these 

seizures violated the First Amendment, because “[t]he remedy of forfeiture is not 

intended to restrain the future distribution of presumptively protected speech.” Id. 

at 75 n.13. Despite the fact that the materials at issue could be forfeitable upon 

conviction, the Court held that “the seizure at issue here is unconstitutional.” Id. at 

65.21

This Court applied Fort Wayne Books to invalidate federal RICO pretrial 

forfeiture provisions in Reno, 41 F.3d 503 (re-adopting holding invalidating 

pretrial forfeitures as set forth in Barr, 960 F.2d 781). It found “the reasoning of 

Fort Wayne Books is equally applicable to the federal RICO statute,” whose 

authorization of pretrial forfeitures of constitutionally protected materials “is 

unconstitutional on its face.” Barr, 960 F.2d at 788. The Court explained “[t]he 

First Amendment will not tolerate such seizures until the government’s reasons for 

seizure weather the crucible of an adversary hearing.” Id. It reiterated that 

probable cause is not a sufficient showing to support a forfeiture order. Id.; see

also Fort Wayne Books, 489 U.S. at 66 (“mere probable cause to believe a legal 

 21 The Supreme Court held the forfeiture order unconstitutional even though 

defendants in that case had 39 prior convictions for violating the state’s obscenity 

laws as predicate offenses, and even assuming the materials subject to seizure 

were, in fact, obscene. Fort Wayne Books, 489 U.S. at 51, 65.

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violation has transpired is not adequate to remove books or films from 

circulation”).

The Government has assumed the seizures are supported by the post-seizure 

guilty pleas of Carl Ferrer and Backpage.com, but this glosses over the fact that 

Appellants also are challenging seizures of assets derived from publishing and 

other ventures that predate and are entirely separate from their former interest in 

Backpage.com. See ER 48-52, 513-17. Even as to assets derived from Backpage.com, the Government’s argument assumes that the pleas establish as a matter 

of law that all proceeds derived from the website are unprotected by the First 

Amendment, a proposition that has been rejected uniformly by the courts. See 

supra notes 3, 17. But the pleas cannot be used to support this assumption.22 Even 

if the pleas of other parties could be accepted as evidence regarding the general 

characteristics of the website, they do nothing to affect Appellants’ First Amendment defenses where mens rea is a central issue, as it is here. See supra 30-32.

23

 22 The Government’s position ignores this Court’s warning that “plea agreement[s] may adopt facts the government wants to hear in exchange for some 

benefit.” United States v. Vera, 893 F.3d 689, 692-93 (9th Cir. 2018). See also 

Lee v. Illinois, 476 U.S. 530, 541 (1986) (accomplices’ confessions and arrest 

statements are “presumptively unreliable,” “presumptively suspect,” and “less 

credible than ordinary hearsay”). Cf. Bruton v. United States, 391 U.S. 123 (1968) 

(admission of co-defendant’s confession inculpating defendant constitutes 

reversible error, despite limiting jury instruction).

23 Further, the “probable cause ... prerequisite for the institution of civil forfeiture proceedings ... [may] not rely on evidence obtained after the institution of 

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In this case, the Government contravened Fort Wayne Books and Reno by 

using seizure authority to close down the second largest classified advertising 

website on the Internet. See, e.g., Center for Democracy & Tech. v. Pappert, 337 

F. Supp. 2d 606, 658 (E.D. Pa. 2004); cf. Vance v. Universal Amusement Co., 445 

U.S. 308, 315-16 (1980) (invalidating nuisance abatement law authorizing business 

closure prior to final adjudication); Spokane Arcades, Inc. v. Brockett, 631 F.2d 

135, 138-39 (9th Cir. 1980) (same), aff’d mem., 454 U.S. 1022 (1981). It is 

immaterial whether the Government actually executed a seizure warrant to close 

down Backpage.com (as claimed in its public announcements), or Ferrer 

succumbed to pressure to close it down at the Government’s direction, in anticipation of his plea agreement. What is at issue here is the validity of the seizure 

orders, and all seizures of website assets, domains, and financial proceeds were 

predicated on the same (defective) showing of probable cause.24 Any order that 

 

forfeiture proceedings.” United States v. $405,089.23 U.S. Currency, 122 F.3d 

1285, 1291 (9th Cir. 1997). See also, e.g., id. at 1289; United States v. 

$186,416.00 U.S. Currency, 590 F.3d 942, 949, 954 (9th Cir. 2010); United States 

v. One 1978 Piper Cherokee Aircraft, 91 F.3d 1204, 1208 n.7 (9th Cir. 1996) 

(Circuit’s de novo review of basis for forfeiture proceeding will “consider only 

evidence that the record discloses was developed prior to the initiation of th[e] 

action”).

24 Regardless of the pleas of Ferrer and Backpage.com, disposition of the 

website and related assets remains a live issue because Appellants’ corporate 

entities hold a lien on all of the assets of Backpage.com and its affiliates, with the 

lien securing, among other things, payment of a sizeable balance of the purchase 

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authorizes shuttering a publishing enterprise prior to trial and conviction plainly is 

unconstitutional.

2. Seizure of Publishing Proceeds Penalizes Speech in 

Violation of the First and Fourth Amendments.

The Court in Fort Wayne Books limited its specific holding to the State’s 

seizure of expressive materials, 489 U.S. at 930 n.12, but the same principles 

govern pretrial seizures of publishing proceeds. See American Library Ass’n v. 

Thornburgh, 713 F. Supp. 469, 484 n.19 (D.D.C. 1989) (“pre-trial seizure of nonexpressive material [including printing presses, bank accounts, etc.] ex parte from 

a business engaged in expressive material also is unconstitutional”), rev’d on 

standing grounds sub nom. American Library Ass’n v. Barr, 956 F.2d 1178, 1194-

96 (D.C. Cir. 1992). 

Since the very beginnings of constitutional doctrine governing freedom of 

the press, the Supreme Court has evaluated government actions by their “operation 

and effect,” not the form they take. In particular, the Court has made clear that the 

First Amendment means more than simply freedom from prior restraint. Near v. 

Minnesota, 283 U.S. 697, 708-09, 714-17 (1931). As First Amendment 

jurisprudence developed, the Court has held that laws restricting or suppressing 

speech “may operate at different points in the speech process,” including 

 

price. City of Erie v. Pap’s A.M., 529 U.S. 277, 288 (2000) (First Amendment 

issue is not moot where resumption of closed business is possible).

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(1) “restrictions requiring a permit from the outset,” (2) “imposing a burden by 

impounding proceeds on receipts or royalties,” (3) “seeking to exact a cost after 

the speech occurs,” or (4) “subjecting the speaker to criminal penalties.” Citizens 

United v. FEC, 558 U.S. 310, 336-37 (2010) (citations omitted) (emphasis added). 

This follows from the well-established rule that depriving writers and publishers of 

compensation for their work violates the First Amendment.25 

The Court applied these principles to hold that the First Amendment prohibits Government action to seize proceeds derived from publishing activities in 

Simon & Schuster, 502 U.S. at 105. In that case, the Court held that the Government cannot “freeze” profits from the sale of a book under a statutory scheme that 

authorized forfeitures of proceeds of crime and prejudgment attachment procedures 

to ensure that wrongdoers “do not dissipate their assets.”26 The Court assumed, 

without deciding, that income derived from expressive activity escrowed by the 

 25 See United States v. National Treasury Emps. Union, 513 U.S. 454, 468-469 

(1995); Playboy Entm’t Grp., 529 U.S. at 812 (reducing profitability of a business 

can infringe the First Amendment because “[t]he distinction between laws 

burdening and laws banning speech is but a matter of degree”); Matal v. Tam, 137 

S. Ct. 1744 (2017) (denial of benefits of trademark registration violates the First 

Amendment); cf. Minneapolis Star & Trib. Co. v. Minnesota Comm’r of Revenue, 

460 U.S. 575, 583-84 (1983) (special taxes on the press act as “a form of prior 

restraint on speech”).

26 Simon & Schuster, 502 U.S. at 111. In this regard, the purpose of the 

infirm statute was identical to the RICO forfeiture provisions struck down in 

Barr, 960 F.2d at 788 (enjoining 18 U.S.C. § 1963(d) authorizing government 

action “to preserve the availability of property ... for forfeiture”).

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law “represent[ed] the fruits of crime” but, nevertheless, held the law was “presumptively inconsistent with the First Amendment” to the extent it “imposes a 

financial burden on speakers because of the content of their speech.” Id. at 115. 

Various similar state laws likewise have been invalidated as unconstitutional.27 

The First Amendment thus precludes the Government’s pretrial seizure of 

Appellants’ bank accounts and other financial assets based on allegations that 

they represent illegal profits derived from Backpage.com. As a matter of basic 

constitutional law, the Government cannot impose restrictions in advance of trial 

based entirely on allegations that a website hosts content related to unlawful 

conduct. See Dart, 807 F.3d at 230-31 (enjoining Sheriff’s actions to “suffocate” 

website financially based on allegations of illegality). Again, such a theory would 

permit the Government to penalize speech by assuming the very point it must 

 27 See Seres v. Lerner, 102 P.3d 91, 97-98 (Nev. 2004) (invalidating Nevada 

law creating special cause of action allowing victims to sue to recover “all 

proceeds, regardless of the extent to which the work relates to the crime against the 

victim”); Keenan v. Superior Court, 40 P.3d 718, 726 (Cal. 2002) (invalidating 

California law that confiscates “all income from expressive materials, whatever 

their general themes or subjects”); In re Opinion of Justices to the Senate, 764 

N.E.2d 343, 350-351 (Mass. 2002) (finding Massachusetts’ proposed “Son of 

Sam” law violated the First Amendment); Curran v. Price, 638 A.2d 93 (Md. 

1994) (invalidating Maryland law because of financial restrictions it placed on 

crime-related expression); see also State ex rel. Napolitano v. Gravano, 60 P.3d 

246, 255 (Ariz. App. Ct. 2002) (upholding Arizona law to the extent forfeiture is 

restricted to specific proceeds of racketeering and defendant is accorded full due 

process before seizure, including an adversary proceeding where state has burden 

of proof).

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prove at trial. Likewise, the Government’s theory in this case, that there are no 

First Amendment ramifications to seizing all of Appellants’ “non-expressive 

assets,” would merely give it a way to achieve indirectly what it cannot do directly. 

Seizing all assets of a website publisher can curtail or penalize speech every bit as 

effectively as seizing the website itself. See supra 37-39.

Because the challenged seizure warrants were predicated on nothing more 

than an assertion of probable cause that Backpage.com hosted advertisements 

relating to unlawful conduct, the District Court should have considered 

Appellants’ motion on its merits and vacated all of the seizure warrants.

C. Seizures of Appellants’ Assets Were Defective Because They 

Relied on a Deficient Affidavit, Violated Due Process, and 

Were Grossly Overbroad.

While no pre-conviction seizure of assets or proceeds of publishing activities 

should have been permitted under the principles of Fort Wayne Books, Appellants 

were afforded no opportunity to challenge the seizures because the Government 

accomplished its objectives using ex parte procedures. Appellants’ Motion to 

Vacate identified numerous deficiencies in the seizure warrants (in addition to the 

illegality of pre-conviction seizures generally), and the Government has yet to 

provide a substantive response. Appellants also argued the procedures the 

Government employed were constitutionally defective, that a heightened burden of 

proof is required, that the seizure warrants were defective under Franks, 438 U.S. 

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154, and that the Government improperly seized assets unrelated to the alleged 

crimes. ER 30-53, 495-518. Each of these issues independently supports an order 

vacating the seizures, and, as explained below, the District Court’s decision to stay 

proceedings and thereby avoid ruling was error.

1. Appellants Were Improperly Denied a Prompt Hearing 

to Challenge the Defective Probable Cause Showing.

Appellants were entitled to a prompt hearing to challenge the sufficiency 

of warrants authorizing the seizures. United States v. Crozier, 777 F.2d 1376, 

1383 (9th Cir. 1985); United States v. $52,100 in U.S. Currency, 2018 WL 

1782934, at *2 (S.D. Cal. Apr. 13, 2018). Where warrants were obtained with an

intentionally or recklessly false affidavit (as in this case), they “must be voided

and the fruits of the search excluded to the same extent as if probable cause were 

lacking.” United States v. Hall, 113 F.3d 157, 159 (9th Cir. 1997) (quoting 

Franks, 438 U.S. at 156).28 In the Motion to Vacate, Appellants showed that 

Inspector Versoza’s affidavits cherry-picked out-of-context phrases in emails to 

support the Government’s allegations, while omitting adjacent statements that 

directly contradicted its theories. ER 37-41, 502-06 (providing detailed 

 28 See also United States v. One 1987 Mercedes Benz, 1992 WL 198441, at *5-

6 (N.D. Ill. Aug. 11, 1992) (finding of probable cause vacated where the court 

affidavit in support of a civil seizure warrant contained false statements that misled 

the judge signing the warrant).

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examples).29 Once Appellants showed that statements in the affidavit were false, 

the District Court should have considered whether there was probable cause for the 

warrant notwithstanding the false statements.30

Appellants showed how the seizure warrants contained all of these 

deficiencies, yet no Franks hearing was conducted. ER 32-41, 497-506. The 

District Court nevertheless stayed proceedings without considering the merits of 

the motion. This had the effect of affirming the seizure warrants, without any 

 29 For example, Versoza claimed internal Backpage emails showed it edited 

ads “to make the advertising of sex trafficking less overt.” ER 89-90, 554-55; see 

generally ER 61-116, 526-81. As an example, he quoted an email he claimed said: 

“I’d like to still avoid Deleting ads when possible,” that “we’re still allowing 

phrases with nuance,” and that “[i]n the case of lesser violations, editing should be 

sufficient.” Id. But contrary to Versoza’s allegation, the email did not mention sex 

trafficking and its only reference to prostitution was the following: “I’d still like to 

avoid Deleting ads when possible, but if an ad makes a clear reference to sex for 

money or an image displays a sex act, don’t hesitate deleting it. Those are not 

the types of ads we want on our site at all. In the case of lesser violations, editing 

should be sufficient.” ER 290, 755 (emphasis added). By omitting language not 

fitting his narrative, Versoza presented the email as saying the opposite of what it 

actually said. Similarly, Versoza claimed Backpage.com’s CEO “wrote an email 

explaining that ... he was unwilling to delete prostitution ads because doing so 

‘would put us in a very uncompetitive position with craig[slist].’” ER 88, 553; see 

generally ER 61-116, 526-81. The email, however, said nothing about prostitution 

ads, but discussed whether ads containing certain terms (none of which reference 

prostitution or sex for money) should be deleted from an ad or whether an entire ad 

should be deleted. ER 284-85, 749-50.

30 United States v. Christakis, 238 F.3d 1164, 1167 n.1 (9th Cir. 2001). 

Franks also requires invalidation when a search warrant was obtained with an

affidavit that intentionally or recklessly omits material facts. See Franks, 438 

U.S. at 156; United States v. DeLeon, 979 F.2d 761, 763 (9th Cir. 1992).

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review, despite failure of the affidavits even under the lesser (albeit improper) 

standard of probable cause. The Motion to Vacate cited specific material 

omissions and misstatements in the seizure affidavits. The Versoza affidavits 

failed to mention any of the cases finding that the First Amendment protects 

online classified advertising websites generally, and Backpage.com in 

particular. ER 34-37, 499-502. They also contained numerous false and 

misleading factual statements regarding Appellants’ level of knowledge and 

involvement with illegal third-party ads on Backpage.com. ER 37-41, 502-06. In 

particular, Inspector Versoza’s claim that internal Backpage.com communications 

proved the website adopted policies “designed to maintain its promotion of sex 

trafficking and prostitution,” was materially false, and the internal communications 

proved just the opposite. ER 38-40, 503-505.

This showing should have prompted the District Court to hold an immediate 

hearing under Franks. But it had no such effect. And when the District Court 

withheld action, the Government used the same defective affidavits to obtain 

additional, separate seizure warrants, despite having full and detailed knowledge of 

their many false statements and other deficiencies.31 RJN 166-234. Appellants 

 31 Although the additional warrants and forfeiture complaints are not directly 

at issue here, this Court can consider the subsequent conduct in assessing whether 

the Government acted intentionally or recklessly when seeking the seizure warrants that are at issue here. 

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asked the District Court to “order an evidentiary hearing and require the 

government to justify any seizures with sufficiently reliable evidence.” ER 53, 

518. The court’s failure to do so was erroneous.

2. Any Hearing Should Have Required a Heightened 

Showing by the Government.

Appellants also argued that if the District Court declined the request to 

vacate the seizures entirely and instead held a hearing, it would be subject to 

rigorous procedural requirements and a heightened standard of proof beyond 

probable cause. ER 30-32, 41-48, 495-97, 506-13. This is required because, when 

free speech issues are implicated, reviewing courts must use “procedural safeguards designed to obviate the dangers of [] censorship.” Southeastern Promotions, Ltd. v. Conrad, 420 U.S. 546, 559-60 (1975). To justify the seizures here, 

the Government must be required to prove that the specific advertisements for 

which it seized proceeds related to unlawful conduct, that Appellants knew those 

specific advertisements related to unlawful conduct, and that Appellants had the 

required mens rea with respect to those specific advertisements. Smith, 361 U.S. at 

153-54.32 

 32 Tellingly, the Government agrees that such a specific showing of mens rea

is required. E.g., Woodhull Freedom Found. v. United States, 334 F. Supp. 3d 185, 

199-201 (D.D.C. 2018) (agreeing with DOJ that newly adopted law, like the Travel 

Act, requires the government to prove “not simply that the defendant was aware of 

a potential result of the criminal offense, but instead that the defendant intended to 

‘explicitly further[]’ a specified unlawful act”), appeal filed, No. 18-5298 ( D.C. 

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In this regard, the Versoza affidavit upon which the seizure warrants were 

based was woefully inadequate. The Supreme Court has described “leaving the 

protection of [First and Fourth Amendment] freedoms to the whim of the officers 

charged with executing the warrant” as a “constitutional impossibility.” Stanford, 

379 U.S. at 485. See Marcus, 367 U.S. at 724-29; Pappert, 337 F. Supp. 2d at 658. 

Such seizures cannot be justified based on “the conclusory assertions of the police 

officer,” as they were here. Lee Art Theatre, Inc. v. Virginia, 392 U.S. 636, 637 

(1968). Accordingly, the District Court was wrong to stay the proceedings below. 

This Court should reverse with instructions to vacate the illegal seizures.

3. The Seizures Were Grossly Overbroad.

Appellants also argued that significant assets were seized that could not be 

justified under any standard because the Government failed to show they were 

connected to criminal activity in any way. These assets included millions of 

dollars derived from publication of newspapers dating to the 1970s, as well as 

publishing proceeds from Backpage.com’s overseas operations, classified ads on 

Backpage.com other than adult ads, and adult ads that had nothing to do with 

prostitution. ER 48-52, 513-17. The Government not only failed to satisfy the 

legal standard for a seizure, but its seizure of these unrelated assets is invalid on its 

 

Cir. Oct. 12, 2018). See id. at 200 (law “is plainly calculated to ensnare only 

specific unlawful acts with respect to a particular individual, not the broad subjectmatter of prostitution”).

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face and violates Appellants’ Sixth Amendment rights. Luis v. United States, 136 

S. Ct. 1083, 1088, 1093 (2016) (“[I]nsofar as innocent (i.e., untainted) funds are 

needed to obtain counsel of choice, we believe that the Sixth Amendment prohibits 

the court order that the Government seeks.”).

The Government has refused to respond to these obvious deficiencies in the 

seizures, and instead maneuvered to avoid ever having to respond. The decision of 

the District Court to stay civil proceedings ratifies and perpetuates this injustice. 

III. The District Court’s Stay Order Was Based on a Mistaken Premise 

That Ignored the Constitutional Bases Underlying the Challenge to 

Pretrial Seizures of Publishing Assets.

The District Court erred in staying proceedings below, including Appellants’ 

Motion to Vacate, based on its conclusion that continuing the civil forfeiture cases 

would impede any subsequent criminal forfeiture if the Government’s civil claims 

should fail. ER 1-2.33 The decision below mistakenly assumes that a ruling on the 

 33 The Government sought a stay, and the District Court granted it, solely on 

the basis of 18 U.S.C. § 981(g). ER 433-37, 1-2. But Section 981(g) authorizes 

stays in only two circumstances—on a motion by the government under Section 

981(g)(1) where discovery in a civil forfeiture proceeding will adversely affect 

related criminal proceedings, cf. ER 433-37, or on motions by claimants to protect 

their rights against self-incrimination in a related criminal case under Section 

981(g)(2). Neither of these are the basis for the District Court’s order staying the 

challenge to the forfeitures. Instead, it relied exclusively on the potential for its 

orders on Appellants’ motion having a preclusive effect in the Arizona criminal 

proceeding. ER 433-37, 1-2. See infra §§ III.A-B. In pursuing the constitutional 

issues on this appeal, Appellants do not waive any argument that the District Court 

misapplied Section 981(g).

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legality of a pretrial seizure of publishing assets in the civil proceeding necessarily 

would have a res judicata effect on post-conviction forfeitures in the criminal 

matter. It also assumes incorrectly that Appellants’ post-conviction remedies 

would adequately address the constitutional injury. Id. Contrary to the District 

Court’s reasoning, Appellants would be denied any possible remedy for their First 

and Fourth Amendment claims if redress must await the outcome of the criminal 

proceeding.

The one case upon which the District Court decision rests does not support 

its conclusion. In Liquidators of European Federal Credit Bank, 630 F.3d at 1139, 

this Court held that criminal forfeiture proceedings were barred by res judicata

after the Government’s separate claim for civil forfeiture was dismissed under the 

statute of limitations, and it instructed the district court on remand to return the 

illegally seized assets. Id. at 1142, 1148. Based on that holding, the District Court 

in this case reasoned that ruling on Appellants’ pending motions “could ultimately 

have preclusive effect on the criminal matter,” and stayed all civil matters pending 

conclusion of the related criminal matter. ER 2. That conclusion does not follow 

from Liquidators of European Federal Credit Bank. Rather, that decision suggests 

the District Court should have been more skeptical of the Government’s “sleight of 

hand” and “contradictory positions.” 630 F.3d at 1148-49. Had it done so, it 

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would have found that none of the asserted grounds for staying Appellants’ motion 

challenging the asset seizures has merit.

A. The Potential Preclusive Effect That Concerned the District Court 

Does Not Apply in the Context of Appellants’ First and Fourth 

Amendment Challenges to the Government’s Seizures.

In Liquidators of European Federal Credit Bank, this Court held that a final 

order dismissing a civil forfeiture complaint as barred by the statute of limitations 

had a res judicata effect on a subsequent criminal proceeding. Id. at 1151-52. 

Here, however, Appellants were not seeking a final order to dismiss the civil 

forfeiture proceedings, but instead were seeking a ruling on the constitutionality of 

pretrial seizures.

Contrary to the District Court’s assumption, granting Appellants’ motion 

based on First and Fourth Amendment limits to the Government’s power to seize 

publishing assets before trial would not preclude the Government from seeking to 

enforce criminal forfeitures after trial, if it ultimately proves its case and proper 

grounds for forfeiture.

34 As Appellants showed—so far to no response from the 

Government or analysis by the District Court—the First and Fourth Amendments 

prohibit pretrial seizures of publishing assets and proceeds. ER 25-32, 490-97. It 

 34 Of course, First and Fourth Amendment issues will be relevant to the 

criminal proceedings and will affect such issues as the required burden of proof. 

But that fact is no reason to stay Appellants’ challenge to unconstitutional pretrial 

seizures.

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does not matter whether the Government seeks to effect such an unconstitutional 

seizure using criminal or civil process—the result is the same. Put another way, 

the Government clearly cannot impose such a forfeiture in a criminal proceeding 

before conviction, and it also cannot use civil forfeiture provisions as an end run in 

an attempt legitimize such an unconstitutional seizure. 

Accordingly, the District Court was wrong in its conclusion that ruling on 

Appellants’ challenge to pretrial seizures would have a preclusive effect on the 

Government’s bid for post-conviction forfeitures. That was the entire point of both 

Fort Wayne Books, 489 U.S. at 61-64, and Reno, 41 F.3d at 505, which held that 

different constitutional standards govern pretrial seizures and post-trial forfeitures 

of publishing assets. See also Barr, 960 F.2d at 788-89; Reno, 41 F.3d at 504-05.

35

 35 This Court’s analysis in Liquidators of European Federal Credit Bank discusses how federal criminal and civil forfeiture provisions work in tandem to cover 

the same assets. A criminal forfeiture proceeding is an in personam action against 

the defendant, is part of the punishment, and “the government first must prove, 

beyond a reasonable doubt, that the defendant is guilty of the crime.” 630 F.3d at 

1149. Civil forfeiture, on the other hand, is an in rem action where “the government generally must prove, by a preponderance of the evidence, the culpability of 

the owner and a nexus between the property and the illegal activity.” Id. If the 

criminal prosecution fails, the Government may still seek civil forfeiture because it 

requires a lower burden of proof. Id. at 1150. But if the civil forfeiture is brought 

first and is dismissed in a final order, criminal forfeiture of the same assets is 

precluded as res judicata. This Court reasoned that where the Government fails to 

justify a forfeiture under the more lenient civil burden of proof, it certainly could 

not justify a forfeiture under the higher criminal standard. Id. at 1152 & n.8. But 

nothing in Liquidators suggests pretrial seizure of publishing proceeds would be 

acceptable under either civil or criminal procedures.

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B. The District Court Erroneously Concluded that Appellants Could 

Seek Effective Relief in the Criminal Proceeding.

The second ground for the stay order—that the District Court perceived “no 

reason why Movants’ pending motions could not be brought in the criminal 

action” —is likewise erroneous because it ignores the First Amendment context in 

which this case arose. To the extent the District Court was suggesting Appellants 

could obtain relief under Rule 41(g) in the Arizona criminal case, that is an inapt 

option in the present context of First Amendment violations relating to pretrial 

civil forfeitures. ER 2.

36

Rule 41(g) is not available as a criminal motion once civil forfeiture 

complaints are filed, as they were here. United States v. U.S. Currency 

$83,310.78, 851 F.2d 1231, 1232-33 (9th Cir. 1988); Omidi v. United States, 851 

F.3d 859, 862 (9th Cir. 2017) (Rule 41(g) motions are not available after civil 

forfeiture proceedings are initiated).37 In any event, the District of Arizona already 

held it will not assert jurisdiction over seizures based on warrants issued in the 

CDCA. See RJN 99. 

 36 Rule 41(g) (formerly Rule 41(e)) provides that “[a] person aggrieved by an 

unlawful search and seizure of property or by the deprivation of property may 

move for the property’s return.” Fed. R. Crim. P. 41(g). 

37 By its plain terms, Rule 41(g) requires motions to be filed “in the district 

where the property was seized,” so it is unclear how the District Court in Arizona 

could exercise jurisdiction over assets seized pursuant to warrants issued in the 

CDCA under Rule 41(g). See United States v. Unimex, 991 F.2d 546, 550-51 (9th 

Cir. 1993). 

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Finally, to the extent any remedy must await the outcome of the criminal 

proceeding, it is not responsive to say a post-trial remedy is available when the 

constitutional problem to be addressed involves pretrial seizures. Where the First 

Amendment question to be decided is whether the Government can seize such 

proceeds prior to conviction (or at least prior to an adversary hearing), a stay 

deferring review to the end of the criminal case effectively decides the issue and 

leaves Appellants without a remedy. The importance of immediate review in these 

circumstances is why the Supreme Court accepted a petition for interlocutory 

review in Fort Wayne Books, which, like this case, involved the constitutionality of 

seizing publishers’ assets prior to conviction. The Court took jurisdiction, finding 

“it would be intolerable to leave unanswered, under these circumstances, an 

important question of freedom of the press under the First Amendment.” 489 U.S. 

at 56. See also Miami Herald Publ’g Co. v. Tornillo, 418 U.S. 241, 246-47 & n.6 

(1974) (same).38 

 38 Courts frequently review a case’s merits where further delay would exacerbate First Amendment harms. Thus, in Village of Skokie, the Supreme Court 

treated a stay order of the Illinois Supreme Court as a final order and reversed. 

The Court held that delay in considering an immediate (and expedited) appeal 

would be an ongoing burden on rights protected by the First Amendment. 432 

U.S. at 43-44. See also P.H.E., Inc., 965 F.2d at 857 (“[F]ederal courts have 

asserted jurisdiction in a number of contexts involving non-final orders, in which 

the proceedings complained of infringed on First Amendment rights.”).

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The same conclusion is warranted here. The District Court should have 

ruled and vacated the seizures, rather than granting a stay. This Court should 

reverse the decision below with instructions to vacate the seizures.

C. The Government’s Gamesmanship Alone is Reason to Deny a 

Stay.

The Government’s tactics and repeated efforts to evade review provide ample 

reason to reverse the District Court’s grant of a stay. The Government seized 

publishing assets and proceeds via ex parte procedures and a knowingly false 

affidavit that failed to meet even the attenuated standard of probable cause. It 

continued to obtain seizure warrants and seize additional assets after being placed on 

notice of the affidavit’s fatal deficiencies, going so far as to seize funds in attorneys’ 

trust accounts as part of an effort to undermine Appellants’ ability to mount a 

defense. It has endeavored at every turn to prevent Appellants from presenting their 

constitutional objections to these overbearing tactics, and has repeatedly looked for 

ways to preclude courts from reaching the merits of Appellants’ constitutional 

objections. If this gambit is successful, the Government will have found an end run 

around Fort Wayne Books, Simon & Schuster, and the other authorities cited above, 

without ever having to make a constitutional argument. Obtaining a stay from the 

District Court was integral to this malign strategy.

The Government has never filed a substantive response to Appellants’ 

arguments for vacating the seizures. Its strategy has been to avoid addressing the 

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merits by arguing in each jurisdiction that objections should have been lodged 

elsewhere, and eventually staying all civil proceedings until the conclusion of the 

criminal trial. In this way, the Government is attempting to avoid being held 

accountable at any point.

This Court rejected similar tactics in Liquidators of European Federal 

Credit Bank, where it held the Government had misused its forfeiture authority and 

attempted to evade review by taking inconsistent positions. 630 F.3d at 1148-49. 

As in this case, the Government had pursued criminal and civil forfeitures 

simultaneously, and opposed claimants’ due process challenges by arguing they 

could raise their concerns in a soon-to-be commenced ancillary proceeding. 

However, once that proceeding was commenced, the Government argued the 

relevant statutes and rules barred the challenge. Id. at 1143-44. Appellants in that 

case argued the Government had perpetrated a “shell game” in which it claimed 

they could raise their arguments later, but subsequently stated they could not raise 

their arguments at all. The Court found appellants’ “concern turned out to be 

justified,” and “under the circumstances, judicial estoppel bars the Government 

from effecting its sleight of hand.” Id. at 1148. 

This Court employed the doctrines of judicial estoppel and res judicata in 

Liquidators of European Federal Credit Bank to void seizures where the 

Government had seized assets to which it had no legal right and then manipulated 

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the process to foreclose any ability to bring a challenge. Citing Crozier, the 

Liquidators argued Congress could not have intended the allegedly absurd result 

that the Government is permitted to seize and keep property while precluding its 

owners from mounting a challenge. Id. at 1147-48 & n.4. This Court agreed, but 

found it unnecessary to resolve the due process issue where it could simply bar the 

Government’s gamesmanship as judicially estopped, and hold the forfeitures 

invalid under res judicata as outside the statute of limitations. Id. Here, the Court 

should likewise hold the Government is estopped from taking inconsistent 

positions designed to cut off review (thus reversing the stay order), and should then 

hold, on the merits, that the seizures are invalid for the reasons Appellants have set 

forth here and below. 

CONCLUSION

For the foregoing reasons, Appellants respectfully urge that this Court 

should find it has jurisdiction to hear this appeal under 28 U.S.C. §§ 1291 and 

1292(a)(1), and vacate the stay below and order the District Court to vacate the 

seizures. Alternatively, because this case presents purely legal issues and is 

subject to de novo review, the Court should issue an order vacating the seizures to 

prevent further deprivation of Appellants’ constitutional rights. Dart, 807 F.3d at 

239.

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RESPECTFULLY SUBMITTED this 6th day of February, 2019.

James C. Grant 

DAVIS WRIGHT TREMAINE LLP

920 Fifth Avenue

Suite 3300

Seattle, WA 98104

Telephone: (206) 622-3150

Facsimile: (206) 757-7700

Email: jamesgrant@dwt.com

Robert Corn-Revere 

Ronald G. London

DAVIS WRIGHT TREMAINE LLP

1919 Pennsylvania Ave., NW

Suite 800

Washington, DC 20006

Telephone: (202) 973-4200

Facsimile: (202) 973-4499

Email: bobcornrevere@dwt.com

 ronaldlondon@dwt.com

Thomas H. Bienert, Jr.

Whitney Z. Bernstein

BIENERT, MILLER & 

 KATZMAN, PLC

903 Calle Amanecer

Suite 350

San Clemente, CA 92673

Telephone: (949) 369-3700

Facsimile: (949) 369-3701

Email: tbienert@bmkattorneys.com

 wbernstein@bmkattorneys.com

Paul John Cambria, Jr.

Erin McCampbell Paris

LIPSITZ GREEN SCIME

 CAMBRIA LLP

42 Delaware Avenue

Suite 300

Buffalo, NY 14202-3857

Telephone: (716) 849-1333

Email: pcambria@lglaw.com

 emccampbell@lglaw.com

Bruce Feder

FEDER LAW OFFICE, P.A.

2930 E. Camelback Road

Suite 160

Phoenix, AZ 85016

Direct: 602-257-0135

Email: bf@federlawpa.com

Gary S. Lincenberg

Ariel A. Neuman

BIRD, MARELLA, BOXER,

 WOLPERT, NESSIM, DROOKS,

 LINCENBERG & RHOW P.C.

Suite 2300

1875 Century Park East

23rd Floor

Los Angeles, CA 90067-2561

Telephone: (310) 201-2100

Email: glincenberg@birdmarella.com

 aneuman@birdmarella.com

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56

STATEMENT OF RELATED CASES

Pursuant to Circuit Rule 28-2.6, counsel for James Larkin, John Brunst, 

Michael Lacey, and Scott Spear represent that they are not aware of any other 

related cases pending in this Court.

BIENERT, MILLER & KATZMAN, PLC

By s/ Thomas H. Bienert, Jr.

Thomas H. Bienert, Jr.

903 Calle Amanecer, Suite 350

San Clemente, CA 92672

Tel: (949) 369-3700

Fax: (949) 369-3701

Email: tbienert@bmkattorneys.com

Attorneys for Appellants

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CERTIFICATE OF COMPLIANCE

The foregoing brief complies with the requirements of Cir. Rule 32, because 

it is proportionately spaced in Times New Roman 14-point type, and according to 

the word processing system used to prepare it, and in accordance with Circuit Rule 

32(a)(7)(B), the word count of the brief is 13,411. 

DATED this 6th day of February, 2019.

BIENERT, MILLER & KATZMAN, PLC

By s/ Thomas H. Bienert, Jr.

Thomas H. Bienert, Jr.

903 Calle Amanecer, Suite 350

San Clemente, CA 92672

Tel: (949) 369-3700

Fax: (949) 369-3701

Email: tbienert@bmkattorneys.com

 Attorneys for Appellants

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ADDENDUM OF CONSTITUTIONAL AND STATUTORY PROVISIONS

United States Constitution, First Amendment: 

Congress shall make no law respecting an establishment of religion, 

or prohibiting the free exercise thereof; or abridging the freedom of 

speech, or of the press; or the right of the people peaceably to 

assemble, and to petition the Government for a redress of grievances.

United States Constitution, Fourth Amendment: 

The right of the people to be secure in their persons, houses, papers, 

and effects, against unreasonable searches and seizures, shall not be 

violated, and no Warrants shall issue, but upon probable cause, 

supported by Oath or affirmation, and particularly describing the place 

to be searched, and the persons or things to be seized.

United States Constitution, Fifth Amendment: 

No person shall be held to answer for a capital, or otherwise infamous 

crime, unless on a presentment or indictment of a Grand Jury, except 

in cases arising in the land or naval forces, or in the Militia, when in 

actual service in time of War or public danger; nor shall any person be 

subject for the same offence to be twice put in jeopardy of life or 

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limb; nor shall be compelled in any criminal case to be a witness 

against himself, nor be deprived of life, liberty, or property, without 

due process of law; nor shall private property be taken for public use, 

without just compensation.

United States Constitution, Sixth Amendment: 

In all criminal prosecutions, the accused shall enjoy the right to a 

speedy and public trial, by an impartial jury of the State and district 

wherein the crime shall have been committed, which district shall 

have been previously ascertained by law, and to be informed of the 

nature and cause of the accusation; to be confronted with the 

witnesses against him; to have compulsory process for obtaining 

witnesses in his favor, and to have the Assistance of Counsel for his 

defence.

18 U.S.C. § 981

* * * *

(g)(1) Upon the motion of the United States, the court shall stay the 

civil forfeiture proceeding if the court determines that civil discovery 

will adversely affect the ability of the Government to conduct a 

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related criminal investigation or the prosecution of a related criminal 

case.

(2) Upon the motion of a claimant, the court shall stay the civil 

forfeiture proceeding with respect to that claimant if the court 

determines that--

(A) the claimant is the subject of a related criminal 

investigation or case;

(B) the claimant has standing to assert a claim in the civil 

forfeiture proceeding; and

(C) continuation of the forfeiture proceeding will burden the 

right of the claimant against self-incrimination in the related 

investigation or case.

(3) With respect to the impact of civil discovery described in 

paragraphs (1) and (2), the court may determine that a stay is 

unnecessary if a protective order limiting discovery would protect the 

interest of one party without unfairly limiting the ability of the 

opposing party to pursue the civil case. In no case, however, shall the 

court impose a protective order as an alternative to a stay if the effect 

of such protective order would be to allow one party to pursue 

discovery while the other party is substantially unable to do so.

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(4) In this subsection, the terms “related criminal case” and “related 

criminal investigation” mean an actual prosecution or investigation in 

progress at the time at which the request for the stay, or any 

subsequent motion to lift the stay is made. In determining whether a 

criminal case or investigation is “related” to a civil forfeiture 

proceeding, the court shall consider the degree of similarity between 

the parties, witnesses, facts, and circumstances involved in the two 

proceedings, without requiring an identity with respect to any one or 

more factors.

(5) In requesting a stay under paragraph (1), the Government may, in 

appropriate cases, submit evidence ex parte in order to avoid 

disclosing any matter that may adversely affect an ongoing criminal 

investigation or pending criminal trial.

(6) Whenever a civil forfeiture proceeding is stayed pursuant to this 

subsection, the court shall enter any order necessary to preserve the 

value of the property or to protect the rights of lienholders or other 

persons with an interest in the property while the stay is in effect.

(7) A determination by the court that the claimant has standing to 

request a stay pursuant to paragraph (2) shall apply only to this subCase 2:18-cr-00422-DJH Document 507-2 Filed 03/20/19 Page 75 of 77 Case: 18-56455, 02/06/2019, ID: 11181873, DktEntry: 28, Page 74 of 76
62

section and shall not preclude the Government from objecting to the 

standing of the claimant by dispositive motion or at the time of trial.

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I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the 

United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system 

on (date) . 

I certify that all participants in the case are registered CM/ECF users and that service will be 

accomplished by the appellate CM/ECF system.

CERTIFICATE OF SERVICE 

When All Case Participants are Registered for the Appellate CM/ECF System

I hereby certify that I electronically filed the foregoing with the Clerk of the Court for the 

United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system 

on (date) . 

 

Participants in the case who are registered CM/ECF users will be served by the appellate 

CM/ECF system. 

 

I further certify that some of the participants in the case are not registered CM/ECF users. I 

have mailed the foregoing document by First-Class Mail, postage prepaid, or have dispatched it 

to a third party commercial carrier for delivery within 3 calendar days to the following 

non-CM/ECF participants:

Signature (use "s/" format)

CERTIFICATE OF SERVICE 

When Not All Case Participants are Registered for the Appellate CM/ECF System

9th Circuit Case Number(s)

*********************************************************************************

Signature (use "s/" format)

NOTE: To secure your input, you should print the filled-in form to PDF (File > Print > PDF Printer/Creator).

*********************************************************************************

s/Toni Thomas

18-56455

Feb 6, 2019

Case 2:18-cr-00422-DJH Document 507-2 Filed 03/20/19 Page 77 of 77 Case: 18-56455, 02/06/2019, ID: 11181873, DktEntry: 28, Page 76 of 76