United States v. All Assets Held at Bank Julius

502 F.Supp.3d 91

UNITED STATES of America, Plaintiff,

v.ALL ASSETS HELD AT BANK JULIUS, Baer & Company, Ltd., Guernsey Branch, account number 121128, in the Name of Pavlo Lazarenko et al., Defendants In Rem.

Civil Action No. 04-0798 (PLF)

United States District Court, District of Columbia.

Signed November 11, 2020

Daniel Hocker Claman, Adam Jeffrey Schwartz, Teresa Carol Turner-Jones, U.S. Department of Justice, Washington, DC, for Plaintiff.

Bryant Everett Gardner, Winston & Strawn LLP, Washington, DC, Doron Weinberg, Weinberg & Wilder, San Francisco, CA, for Defendants.

OPINION

PAUL L. FRIEDMAN, United States District Judge

This matter is before the Court on claimant Pavel Lazarenko's motion [Dkt. No. 1289] for reconsideration and for leave to amend his amended claim and claimant Pavel Lazarenko's motion [Dkt. No. 1309] to modify the restraining order. Mr. Lazarenko seeks reconsideration of the Court's opinion and order of April 2, 2020, granting the United States’ motion to strike his claim to the Balford Trust. Upon consideration of the parties’ written submissions, the relevant legal authorities, and the entire record in this case, the Court denied both motions by Order of November 4, 2020 [Dkt. No. 1376].¹ This Opinion explains the reasoning behind that Order.

I. FACTUAL AND PROCEDURAL BACKGROUND

The Court's prior opinions summarize the factual and procedural history of this case, starting with the criminal prosecution of Mr. Lazarenko in 2004 and continuing through this long-running in rem civil forfeiture proceeding. See, e.g., United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 307 F.R.D. 249, 250-51 (D.D.C. 2014) ; United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 959 F. Supp. 2d 81, 84-93 (D.D.C. 2013) ; United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 772 F. Supp. 2d 205, 207-08 (D.D.C. 2011) ; United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 571 F. Supp. 2d 1, 3-6 (D.D.C. 2008). Briefly, Mr. Lazarenko was "a prominent Ukrainian politician who, with the aid of various associates, was ‘able to acquire hundreds of millions of United States dollars through a variety of acts of fraud, extortion, bribery, misappropriation and/or embezzlement’ committed during the 1990s." United States v. All Assets Held at Bank Julius Baer & Co., Ltd., 959 F. Supp. 2d at 85 (quoting the Amended Complaint ¶¶ 1, 10). In May 2004, the United States filed an in rem forfeiture complaint seeking forfeiture of, inter alia, "[a]ll funds on deposit at Credit Suisse (Guernsey) Limited, in account number 41610 in the name of Samante Limited as Trustees of the Balford Trust." Complaint at ¶ 5(b). In June 2005, the United States filed an amended complaint identifying an additional bank account in Guernsey, number 41950, and increasing the total Balford Trust assets sought to be forfeited to $147,919,401.13. Amended Complaint at ¶ 5(b). The amended complaint also identified an escrow account for the Balford Trust, 41843, with £ 14,308.52 in pounds sterling of the United Kingdom. Id. at ¶ 5(c).

In January 2016, the United States moved to strike Pavel Lazarenko's claim to the Balford Trust assets. See Mot. to Strike. After full briefing, oral argument, and multiple notices of supplemental authority, the Court granted the United States’ motion in April 2020. See United States v. All Assets Held at Bank Julius ("All Funds"), Civil Action No. 04-0798, 480 F.Supp.3d 1, 5–6 (D.D.C. Apr. 2, 2020). Mr. Lazarenko now moves for reconsideration of the Court's opinion and order striking his claim to the Balford Trust. See Mot. for Recon. In the alternative, Mr. Lazarenko moves for modification of the restraining order that has been entered in this case, as it relates to the Balford Trust. See Mot. to Modify. The United States opposes both motions. See US Opp. to Mot. for Recon.; US Opp. to Modify.

II. LEGAL STANDARD

The Federal Rules of Civil Procedure do not specifically address motions for reconsideration. See Estate of Klieman v. Palestinian Auth., 82 F. Supp. 3d 237, 241-42 (D.D.C. 2015), vacated on other grounds , ––– U.S. ––––, 140 S. Ct. 2713, 206 L.Ed.2d 851 (mem.). "While the most analogous rule is Rule 60, which provides relief from a final judgment or order, motions to reconsider interlocutory orders are not governed by Rule 60(b), but rather, such determinations ‘are within the discretion of the trial court.’ " Id. at 242 (quoting Keystone Tobacco Co. v. U.S. Tobacco Co., 217 F.R.D. 235, 237 (D.D.C. 2003) ); see also FED. R. CIV. P. 54(b) ("[A]ny order or other decision, however designated, that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties ... may be revised at any time before the entry of a judgment adjudicating all the claims and all the parties’ rights and liabilities."); Langevine v. District of Columbia, 106 F.3d 1018, 1023 (D.C. Cir. 1997) ("Interlocutory orders are not subject to the law of the case doctrine and may always be reconsidered prior to final judgment."). This judicial discretion is broad. While the judicial interest in finality disfavors reconsideration, a district court has inherent authority to reconsider its interlocutory orders "as justice requires." See Wannall v. Honeywell Int'l, Inc., 292 F.R.D. 26, 30-31 (D.D.C. 2013), aff'd sub nom. Wannall v. Honeywell, Inc., 775 F.3d 425 (D.C. Cir. 2014) (citations omitted).

To determine whether justice requires reconsideration of an interlocutory decision, courts look to whether the moving party has demonstrated "(1) an intervening change in the law; (2) the discovery of new evidence not previously available; or (3) a clear error in the first order." Klayman v. Jud. Watch, Inc., 296 F. Supp. 3d 208, 213 (D.D.C. 2018) (quoting Zeigler v. Potter, 555 F. Supp. 2d 126, 129 (D.D.C. 2008)). Even where none of these three factors is present, "the Court may nevertheless elect to grant a motion for reconsideration if there are other good reasons for doing so." Cobell v. Norton, 355 F. Supp. 2d 531, 540 (D.D.C. 2005). For example, justice may require revision where "the Court has patently misunderstood a party, has made a decision outside the adversarial issues presented to the Court by the parties, [or] has made an error not of reasoning but of apprehension." See Singh v. George Washington Univ., 383 F. Supp. 2d 99, 101 (D.D.C. 2005) (internal quotations and citation omitted); see also Stewart v. FCC, 189 F. Supp. 3d 170, 173 (D.D.C. 2016) ; Wultz v. Islamic Republic of Iran, 762 F. Supp. 2d 18, 23-24 (D.D.C. 2011).

"Motions for reconsideration are ‘disfavored.’ " Wright v. F.B.I., 598 F. Supp. 2d 76, 77 (D.D.C. 2009) (quoting Andreen v. Lanier, 582 F. Supp. 2d 48, 49-50 (D.D.C. 2008) ). The efficient administration of justice requires that there be good reason for a court to reconsider an issue already litigated by the parties: "[W]here litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again." Isse v. Am. Univ., 544 F. Supp. 2d 25, 30 (D.D.C. 2008) (quoting Singh v. George Washington Univ., 383 F. Supp. 2d at 101 ). Motions for reconsideration "cannot be used as an opportunity to reargue facts and theories upon which a court has already ruled, nor as a vehicle for presenting theories or arguments that could have been advanced earlier." Klayman v. Jud. Watch, Inc., 296 F. Supp. 3d at 213-14 (citation omitted). Ultimately, the moving party has the burden to demonstrate "that reconsideration is appropriate." FBME Bank Ltd. v. Mnuchin, 249 F. Supp. 3d 215, 222 (D.D.C. 2017) (quoting U.S. ex rel. Westrick v. Second Chance Body Armor, Inc., 893 F. Supp. 2d 258, 268 (D.D.C. 2012) ).

III. MOTION FOR RECONSIDERATION

In his motion for reconsideration, Mr. Lazarenko argues that this Court made clear factual and legal errors in the Balford Trust Opinion that warrant reconsideration. The Court will address each argument in turn.

A. Settlement of the Funds into Three Guernsey Accounts

Mr. Lazarenko's motion takes no issue with the Court's description of the three in rem defendant accounts relevant here – accounts 41610, 41950, and 41843 – which are the three accounts of which the Balford Trust consists. Rather, Mr. Lazarenko faults the Court's description of how the funds were deposited into those accounts. In passing, the Court noted in its Balford Trust Opinion that Mr. Lazarenko settled funds into one of the three Balford Trust accounts. See All Funds, 480 F.Supp.3d at 19–20 (noting that the form stating that Mr. Lazarenko was the beneficial owner of account 914499-4 "says nothing about what happened to Mr. Lazarenko's interest once he settled his assets into the Balford Trust in account 41610").

Mr. Lazarenko now seeks to clarify that it was Samante Limited, the trustee of the Balford Trust, and not Mr. Lazarenko, who moved the funds from the Switzerland account to the accounts in Guernsey. See Mem. Mot. for Recon. at 2. The United States agrees that Mr. Lazarenko himself did not transfer any funds into the Balford Trust accounts but argues that "the Court in no way relied on this fact in reaching its conclusion." See US Opp. to Mot. for Recon. at 14. The Court finds that it was Samante Limited that moved funds into the Balford Trust account. The Court also finds that this clarification does not alter the legal conclusions it reached in the Balford Trust Opinion. That decision focused on Mr. Lazarenko's interest in the funds after they were moved to Guernsey; it did not turn on who moved the funds to Guernsey.

Mr. Lazarenko also seeks to clarify that while he is listed as the "beneficial owner" of the funds in an account ending in 91449-4, Samante Limited was the signatory. See Mem. Mot. for Recon. at 7-8. The Court never expressly found that Mr. Lazarenko was the beneficial owner of the funds in the account ending in 91449-4. Rather, the Court simply cited to language in the amended complaint...