United States v. Two Hundred Eighty-Four Thousand Nine Hundred Forty-Two & 00/100 Dollars ($284,942.00) in U.S. Currency

UNITED STATES OF AMERICA, Plaintiff, v. TWO HUNDRED EIGHTY-FOUR THOUSAND NINE HUNDRED FORTY-TWO AND 00/100 DOLLARS ($284,942.00) IN UNITED STATES CURRENCY, Defendant.

Case No. 1:19-cv-736

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF OHIO WESTERN DIVISION - CINCINNATI

September 4, 2020

Judge Matthew W. McFarland

ORDER DENYING CLAIMANT'S MOTION TO DISMISS (Doc. 8)

This case is before the Court on Claimant Jerry J. Miller's Motion to Dismiss (Doc. 8). Miller moves to dismiss the Complaint (Doc. 1) for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. The Government filed a Response in Opposition (Doc. 18). Although Mr. Miller requested and received an extension of time to file a reply in support, he failed to file one and his time to do so (July 13, 2020) has passed. This matter is thus ripe for review.

FACTS

Shortly after midnight on April 6, 2019, an Ohio State Highway Patrol (OSHP) Trooper initiated a traffic stop after he observed Miller driving a Chevrolet Suburban 87 miles per hour in a 70 mile per hour zone in Wilmington, Ohio. When he approached the vehicle, the Trooper observed furtive movements by both Miller—the driver—and his passenger. The Trooper quickly detected the strong odor of marijuana and noticed that Miller was acting "distant" and would not maintain eye contact. Instead, Miller kept repeatedly looking towards the vehicle's center console. When asked, Miller denied that there was any marijuana in the vehicle. This prompted the Trooper to direct Miller to exit the vehicle for further investigation. At this point, Miller admitted that there was a small amount of marijuana in the front dash console.

After placing Miller and his passenger in the back of his cruiser, the Trooper searched a law enforcement database and learned that Miller had an active warrant out for his arrest in Oregon for drug possession. Based on these circumstances, the Trooper felt prompted to conduct a search of the vehicle. He quickly located a jar of marijuana where Miller indicated it would be. But the Trooper also found an electronic money counting machine and a large amount of United States currency. The money was spewed throughout the Suburban. A large amount of it was found in bags in the second row of seats, while some was spilling out of a plastic bag in the center console. Nor was the money contained or packaged in any order. Some was bundled with rubber bands, some was open, some was vacuum sealed, and some was placed in zip lock plastic bags. When asked, Miller stated that the money was his and that he estimated there was "about 270" in the car (meaning $270,000).

While searching the vehicle, the Trooper noticed several vehicles dramatically slowing down as they approached the traffic stop. Knowing that individuals who transport bulk currency with narcotics often have more than one vehicle traveling with them as "tail vehicles," the Trooper requested back up. After additional troopersarrived on the scene, the Trooper continued his search and found three cell phones, one of which rang multiple times from a number originating from California. He also found rental paperwork which showed that the vehicle had been rented by Miller's wife and had been driven more than 4,907 miles during the rental period, along with a one way plane ticket, in the passenger's name, from Cleveland to Los Angeles.

Based on this evidence, as well as his training and experience with drug interdiction, the Trooper suspected that the currency was related to a criminal enterprise. He decided to seize the vehicle and its contents and had the vehicle towed to OSHP's Wilmington post. He also contacted OSHP's Criminal Patrol Unit and advised the Commander about the traffic stop. The Commander, in turn, contacted the Cincinnati Drug Enforcement Agency (DEA) for guidance and direction. The DEA knew Miller as a multi-kilogram cocaine and marijuana dealer who had an open warrant and case in Oregon involving ten pounds of marijuana. DEA agents stayed in constant contact with OSHP throughout the traffic stop and agreed to meet with the Trooper, the Commander, the vehicle, and its occupants at the Wilmington Post.

At the Wilmington Post, the decision was made that the DEA would seize the currency. Investigators unlocked the Suburban, photographed the currency where it was found in the vehicle, and placed it into a DEA evidence bag. Investigators observed what appeared to be marijuana residue on the electronic money counter. The currency was then taken to the basement of the Wilmington Post where a trained narcotics detection K9 "Tao" conducted a controlled sniff. Tao showed a positive alert for the odor of narcotics on a locker that contained the currency.

DEA agents then informed Miller that the DEA was going to seize the currency. Miller was supplied with a receipt for the currency, the electronic money counter, two cell phones, and two storage locker identification cards, all of which had been seized from the Suburban. He was given the opportunity to sign the evidence bag containing the currency but declined. Miller was cited for speeding and a minor misdemeanor marijuana drug possession. Then he and his passenger were released.

The seized currency remained at the Wilmington Post for two days until the DEA retrieved it. Three days after that, on April 11, 2019, the DEA took the seized currency to a counting facility where an official count determined that it totaled $284,942.00. The next day, the currency was deposited into the Seized Asset Deposit Fund. The DEA timely initiated administrative forfeiture proceedings against the currency by sending notice to all potential claimants pursuant to 19 U.S.C. § 1607(a) and 18 U.S.C. § 983(a). Miller responded and asserted his ownership interest.

Meanwhile, however, on April 11, 2019, Miller filed a petition for the return of the seized currency in the Fayette County Court of Common Pleas (Case No. CVH 20190120). Three months later, the state court dismissed Miller's petition, finding that it lacked subject matter jurisdiction which, due to the DEA seizure, now vested exclusively in federal court. Ohio's Twelfth District Court of Appeals affirmed. See Miller v. Ohio State Highway Patrol, 2020-Ohio-3231, 2020 WL 3045976 (12th Dist. 2020).

Miller now seeks to dismiss this federal civil forfeiture action based on the same, or similar, reasons that he argued—and lost—in state court: (1) under Fed. R. Civ. P. 12(b)(1) because this Court lacks subject matter jurisdiction; and (2) under Fed. R. Civ. P12(b)(6) and Rule G(8)(b) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions ("Supplemental Rules") because the Government has failed to state a claim upon which relief may be granted.

LAW

I. Lack of subject matter jurisdiction under Rule 12(b)(1)

"Subject matter jurisdiction defines the court's authority to hear a given type of case" and represents "the extent to which a court can rule on the conduct of persons or the status of things." Carlsbad Tech., Inc. v. HIF Bio, Inc., 556 U.S. 635, 639 (2009) (citations omitted). "Federal courts are courts of limited jurisdiction and the law presumes that a cause lies outside this limited jurisdiction." Boegh v. EnergySolutions, Inc., 772 F.3d 1056, 1064 (6th Cir. 2014) (quoting Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994) (internal quotation marks omitted). Fed. R. Civ. P. 12(b)(1) allows a party to move to dismiss a claim for lack of subject matter jurisdiction. When a court lacks subject matter jurisdiction, dismissal is mandatory.

II. Failure to state a claim in a civil forfeiture proceeding

In civil forfeiture cases, a motion to dismiss for failure to state a claim is governed by 18 U.S.C. § 983 and Rules G(8)(b)(ii) and G(2)(f) of the Supplemental Rules. United States v. $506,069.09 Seized From First Merit Bank, 664 F. App'x 422, 433 (6th Cir. 2016). Both 18 U.S.C. § 983(a)(3)(D) and Supplemental Rule G(8)(b)(ii) state that a "complaint may not be dismissed on the ground that the government did not have adequate evidence at the time the complaint was filed to establish the forfeitability of the property." Id. Rather, "[t]he sufficiency of the complaint is governed by Rule G(2)."Supplemental Rule G(8)(b)(ii).

Rule G(2), in turn, establishes the requirements for an adequate civil forfeiture complaint, the last of which provides that "[t]he complaint must . . . state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial." Supplemental Rule G(2)(f). As with a motion to dismiss under Fed. R. Civ. P. 12(b)(6), the Court must accept all allegations of material fact as true and construe them in the light most favorable to the non-moving party. See $506,069.09, 664 F. App'x at 433; Bell Atl. Corp. v. Twombly, 550 U.S. 544, 554-55 (2007).

ANALYSIS

I. Subject Matter Jurisdiction

Under 28 U.S.C. § 1345, federal district courts have "original jurisdiction of all civil actions, suits or proceedings commenced by the United States." And under 28 U.S.C. § 1355, district courts have original jurisdiction over forfeiture proceedings. Both of these sections confer the Court with subject matter jurisdiction here. The United States commenced this action and seeks the in rem forfeiture of $284,942.00 in currency pursuant to 21 U.S.C. § 881(a)(6). (Doc. 1 at ¶ 1.) That section makes "all moneys . . . furnished or intended to be furnished by any person in exchange for a controlled substance . . . in violation of this subchapter, all proceeds traceable to such an exchange, and all moneys . . . used or intended to be used to facilitate any violation of this subchapter" subject to forfeiture. 21 U.S.C. § 881(a)(6). Because this is a forfeiture action brought by the United States, the Court is satisfied that it has subject matter jurisdiction.

Miller, however, argues that this Court lacks jurisdiction on several...