usa v htmlcomics.com us motion to dismiss counterclaim

UNITED STATES DISTRICT COURTMIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v. Case No. 8:10-cv-1214-T-27TBM

PlayboyMonthly.com,HTMLcomics.com,HTM1comics.com,htmlc0mics.com,ComicBooksFree.com, andHTMLmagazines.com

Defendants.

____________________________/

UNITED STATES’ MOTION TO DISMISS CLAIMANT’S COUNTERCLAIM

The United States of America, by and through the undersigned Assistant

United States Attorney, respectfully moves this Court under Federal Rule of Civil

Procedure 12(b)(6) to dismiss Claimant Gregory S. Hart’s “Counterclaim for

Injunctive and Declaratory Relief and for Damages” because (1) a counterclaim

is a legal nullity in an in rem forfeiture action, (2) the Claimant failed to establish

that the United States has waived sovereign immunity as to allow a counterclaim,

and (3) none of the Claimant’s counterclaims state a claim upon which relief can

be granted. In support thereof the United States submits the following

memorandum of law.

Case 8:10-cv-01214-JDW-TBM Document 28 Filed 08/30/10 of 13 PageID 242

MEMORANDUM OF LAW

I. Procedural History

1. On May 27, 2010, the United States filed its Verified Complaint for

Forfeiture in Rem (Complaint) against the following internet domain names:

PlayboyMonthly.com, HTMLcomics.com, HTM1comics.com, htmlc0mics.com,

ComicBooksFree.com, and HTMLmagazines.com, alleging that they are subject

to forfeiture pursuant to 28 U.S.C. § 2319 as property used, or intended to be

used, to facilitate the commission of criminal copyright infringement offenses in

violation of 17 U.S.C. § 506.

2. On June 22, 2010, the United States personally served the

Claimant with Notices of Complaint for Forfeiture, which directed the Claimant to

file a Verified Claim by July 23, 2010, and an Answer to the Complaint within 21

days after filing the Verified Claim, if he wished to assert an interest in the

property subject to forfeiture. See Supp’l Rule G(5)(a)-(b), Fed. R. Civ. P. That

same day, the Claimant signed an Acknowledgment of Receipt of Notice of

Complaint for Forfeiture on behalf of himself, Database Engineers, Inc., Osoifam,

Inc., and DB Developers, Inc.

3. On June 24, 2010, the Claimant filed a Verified Claim for the

defendant domain names, alleging that he has an interest in the properties

because he is the President of Osoifam, Inc., a Florida corporation that

purchased and holds the registrations for the domain names (Doc. 14).

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4. On June 29, 2010, the Claimant filed an Answer to the Complaint,

which included a Counterclaim for Injunctive and Declaratory Relief and for

Damages (Doc. 15). The Claimant purports to allege four “counts” against the

United States: a First Amendment violation, a Fourth Amendment violation, a

Privacy Protection Act violation under 42 U.S.C. § 2000aa, and Trespass to

Chattels. (Id. at 15). Though the Claimant recites in his papers his disagreement

with the execution of a federal search warrant at his residence on April 20, 2010,

none of the purported “counts” contain any legal elements or facts to support

such claims.

II. Legal Argument

As set forth below, the Claimant’s counterclaims are legally and factually

deficient and should be dismissed. First, a counterclaim is a legal nullity in an in

rem forfeiture proceeding because the action is against the property, not the

third-party claimant. Further, the Claimant has failed to allege that the United

States has waived sovereign immunity as to allow a counterclaim to proceed.

Notwithstanding those fatal defects, the counterclaims also fail to state a claim

upon which relief can be granted.

A. A Claimant May Not Bring a Counterclaim in an In Rem Action

Because a civil forfeiture action is an in rem proceeding, not in personam,

a claimant’s filing of a counterclaim in a civil forfeiture case is a legal nullity. A

civil forfeiture action is an in rem proceeding brought by the government against

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property; the property itself is the defendant. Via Mat Int’l S. Am., Ltd. v. United

States, 446 F.3d 1258, 1264 (11th Cir. 2006) (a civil forfeiture proceeding is not

an action against the claimant but rather is an in rem action against the property).

Because in a civil forfeiture proceeding no claim is filed by the government

against the Claimant, there is no “claim” to “counter.” One Lot of U.S. Currency

($68,000), 927 F.3d 30, 34 (1st Cir. 1991) (dismissing counterclaim in a civil

forfeiture action and explaining that “[b]y definition, a counterclaim is a turn-the-

tables response directed by one party (“A”) at another party (“B”) in

circumstances where (“B”) has earlier lodged a claim in the same proceeding

against (“A”)”); see also United States v. Assorted Computer Equip., No. 03-

2356V, 2004 WL 784493, *2 (W.D. Tenn. Jan. 9, 2004) (same); United States v.

$43,725 in U.S. Currency, No. 4:08-1373-TLW, 2009 WL 347475, *1 (D.S.C.

Feb. 3, 2009) (dismissing claimant’s counterclaims because “the true defendant

in a civil forfeiture action is the property that has been seized, . . . and the

claimant is not entitled to pursue a counterclaim against the Government or

individuals within the limited scope of the in rem civil forfeiture action”).

Here, the Claimant has chosen to intervene in the case by asserting his

interest in the property, but he is not a defendant. Because this civil forfeiture

action has been brought against the property (i.e., the domain names) and not

against the Claimant, he is not entitled to file a counterclaim in this action. See

United States v. 1866.75 Bd. Ft. and 11 Doors and Casings, No. 1:07cv1100

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(GBL), 2008 WL 839792, *3 (E.D. Va. Mar. 25, 2008) (granting the government’s

motion to dismiss claimants’ counterclaims and explaining that any permissible

claim a claimant has against the government must be filed as a separate action);

United States v. $10,000 in U.S. Funds, 863 F. Supp. 812, 816 (S.D. Ill. 1994)

(finding that the claimants’ pleading in a civil forfeiture action was not properly a

counterclaim because “[a] counterclaim is an action brought by a defendant

against the plaintiff”).

Accordingly, the Claimant’s counterclaim is a legal nullity and should be

dismissed.

B. Claimant Failed to Establish a Waiver of Sovereign Immunity

Well-settled is that sovereign immunity bars suit against the United States

except to the extent that it consents to be sued. United States v. Sherwood, 312

U.S. 584, 586 (1941); Means v. United States, 176 F.3d 1376, 1378 (11th Cir.

1999). No suit may be maintained against the sovereign unless the suit is

brought in exact compliance with the terms of the statute under which the

sovereign has consented to be sued. Soriano v. United States, 352 U.S. 270,

276 (1957). A waiver of sovereign immunity may not be implied, but must be

unequivocally expressed. United States v. King, 395 U.S. 1, 4 (1969).

Further, Federal Rule of Civil Procedure 13 governing counterclaims

provides that the “rules to not expand the right to assert a counterclaim . . .

against the United States or a United States officer or agency.” Fed. R. Civ. P.

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13(d). In other words, the requirement that the United States must consent to be

sued also applies to counterclaims. United States v. Timmons, 672 F.2d 1373,

1378-79 (11th Cir. 1982). Further, though the United States may impliedly waive

immunity by initiating an action, a defendant could only assert counterclaims that

arise out of the same transaction or occurrence that is the subject matter of the

government’s suit. Id. at 1379-80. Here, none of the counterclaims arise out of

the same transaction or occurrence as the allegations in the government’s

suit—that the domain names are subject to forfeiture because they have been

used to commit criminal copyright violations.

Of the Claimant’s four “counts,” at least three must be dismissed for lack

of subject matter jurisdiction. No statutory cause of action exists for Trespass to

Chattels, and the United States has not consented to be sued under the terms of

a statute. Likewise, no statutory waiver of immunity exists for a First or Fourth

Amendment claim against the United States. As for these alleged constitutional

violations, the only conceivable basis for the Court’s subject matter jurisdiction is

Bivens v. Six Unknown Named Agents of the Federal Bureau of Narcotics, 403

U.S. 388 (1971), under which an individual may bring a cause of action “against

a federal agent who, while acting under the color of federal law, has violated the

constitutional rights of [the] individual.” Hardison v. Cohen, 375 F.3d 362, 1264

(11th Cir. 2004). Bivens actions are brought directly under the Constitution, but

damages can be obtained only when (1) the plaintiff has no alternative means of

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obtaining redress, and (2) no “special factors counseling hesitation” are present.

Id. In essence, a plaintiff must meet heightened pleading requirements to even

pursue a claim under Bivens. See id. Under this standard, the Claimant’s First

and Fourth Amendment counterclaims are grossly deficient and must be

dismissed.

Claimant’s only “count” that possibly survives sovereign immunity analysis

is his “Privacy Protection Act” claim. Though 42 U.S.C. § 2000aa-6 does allow

for a cause of action against the United States by a person aggrieved by an

officer’s search and seizure of materials “possessed by a person reasonably

believed to have a purpose to disseminate to the public a newspaper, book,

broadcast, or other similar form of public communication” in connection with an

investigation or prosecution for a criminal offense, 42 U.S.C. § 2000aa-6(d)

provides that the remedy against the United States under this cause of action is

“exclusive of any other civil action or proceeding for conduct constituting a

violation” of the statute. Because Claimant’s “counts” all appear to be based on

the same conduct—the illegality of a search and seizure of his computer

equipment pursuant to a federal search warrant—a cause of action under 42

U.S.C. § 2000aa would be his exclusive remedy for the conduct alleged and his

three other “counts” could not be maintained.1

1 Even if Claimant’s Privacy Protection Act “claim” survived sovereignimmunity analysis, for the reasons set forth in Section A above his claim isproperly addressed in a separate suit, not in an in rem civil forfeiture action. See

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Notwithstanding, courts have dismissed counterclaims in civil forfeiture

actions on the basis that the claimant has not met his burden of establishing that

his counterclaim falls within an express waiver of sovereign immunity. E.g.,

United States v. Real Property Located at Layton, No. 1:07-CV-006 TS, 2007 WL

2572385, *1 (D. Utah Sept. 5, 2007) (dismissing counterclaims in a civil forfeiture

action because the claimants failed to establish that their counterclaims fell within

an unequivocally expressed waiver of sovereign immunity); $10,000 in U.S.

Funds, 863 F. Supp. at 815-16 (same). Because the Claimant has neither

pointed to any statutory waiver of sovereign immunity on any of his claims nor

alleged any reason why the United States would not be immune from liability

here, the counterclaims should be dismissed.

C. Failure to State a Claim upon which Relief Can Be Granted

Notwithstanding the above fatal defects, the Court should also dismiss the

counterclaims because they fail to state a claim upon which relief can be granted.

Fed. R. Civ. P. 12(b)(6).

Although courts should construe a pro se plaintiff’s pleadings liberally and

hold a pro se plaintiff to a less stringent standard than pleadings drafted by an

attorney, Hughes v. Lott, 350 F.3d 1157, 1160 (11th Cir. 2003), pro se litigants

1866.75 Bd. Ft., 2008 WL 839792 at *3 (explaining that any permissible claim aclaimant has against the government must be filed as a separate suit, not in thein rem forfeiture action). And as detailed in Part C, supra, none of the Claimant’sclaims state a basis upon which relief can be granted.

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must still follow the procedural rules, and the court is not required to rewrite a

deficient pleading. GJR Invests., Inc. v. County of Escambia, 132 F.3d 1359,

1369 (11th Cir. 1998). Additionally, although the court must accept a plaintiff’s

factual allegations as true and construe them in the light most favorable to him,

Spain v. Brown & Williamson Tobacco Corp., 363 F.3d 1183, 1187 (11th Cir.

2004), the pro se litigant must also allege enough to raise a right to relief above

the speculative level. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007);

Conley v. Gibson, 355 U.S. 41, 47 (1957).

Here, the Claimant’s counterclaims fail to follow the pleading requirements

and fail to set forth any legal or factual basis to sustain such claims.

The counterclaims fail to comply with Rule 8, Federal Rules of Civil

Procedure, which provides that a complaint “shall contain . . . (2) a short and

plain statement of the claim showing that the pleader is entitled to relief. . . .”

Fed. R. Civ. P. 8(a)(2). This requirement ensures that the defendant is given fair

notice of what the claim is and the grounds upon which it rests. Conley, 355 U.S.

at 47. To meet this standard, a plaintiff must allege “more than labels and

conclusions, and a formulaic recitation of the elements of a cause of action will

not do.” Twombley, 550 U.S. at 555.

The Claimant appears to allege four “counts” against the United States: a

First Amendment violation, a Fourth Amendment violation, a Privacy Protection

Act violation, and Trespass to Chattels. (Doc. 15 at 15). Yet the counterclaims

9


rest entirely on conclusions that are legally and factually insufficient to sustain

any of those claims. The “Preliminary Statement,” which consists of eight lengthy

paragraphs, attempts to articulate the Claimant’s contentions with the execution

of a federal search warrant at the Claimant’s residence on April 20, 2010. (Doc.

15 at 9-12). Indeed, “Count II” of the counterclaim purports to sue the United

States for a violation of the Claimant’s Fourth Amendment rights. As previously

discussed in Part B above, the Claimant’s remedy for a Fourth Amendment

violation is a Bivens action. Further, a claim for unlawful search and seizure in a

civil forfeiture action is properly raised through a motion to suppress, not a

counterclaim. See Supp’l Rule G(8)(a) (creating a statutory right for a party with

standing to move to suppress illegally seized evidence in a civil forfeiture case);

United States v. $80,633.00, 512 F. Supp. 2d 1196, 1202 (M.D. Ala. 2007), aff’d,

340 F. App’x 579 (11th Cir. Aug. 7, 2009) (a motion to suppress is the proper

means of challenging the legality of a search and seizure in a civil forfeiture

action). In any event, the Claimant fails to plead any facts regarding a Fourth

Amendment violation that would entitle him to relief.

Moreover, the Claimant’s Privacy Protection Act claim under 42 U.S.C. §

2000aa must be dismissed because a cause of action under this statute fails if

there was probable cause to believe that the person possessing the materials

had committed or was committing the criminal offense to which the materials

relate. 42 U.S.C. § 2000aa(a)(1). The April 20, 2010 search and seizure was

10


conducted pursuant to a federal search warrant, and the Claimant does not

allege any fact that would render the warrant or the officers’ reliance on it invalid.

Indeed, it is impossible to decipher exactly what conduct of the United

States the Claimant alleges violated the First Amendment, Fourth Amendment,

and the Privacy Protection Act, or what conduct of the United States constituted

a Trespass to Chattels. The Claimant includes lengthy “Factual Allegations

Related to All Counts,” which appear to contest the forfeiture of the defendant

domain names but contain no facts that would support any cause of action

against the United States. Not only does he fail to set out a short and plain

statement of the claim showing that he is entitled to relief, but the Claimant fails

to even include a recitation of the elements for any of the alleged causes of

action.

Accordingly, the United States respectfully moves for the dismissal of the

counterclaims under Federal Rule of Civil Procedure 12(b)(6) for failure to state a

claim upon which relief can be granted.

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III. Conclusion

For the foregoing reasons, the United States respectfully requests that the

Court dismiss with prejudice Claimant Hart’s Counterclaim for Injunctive and

Declaratory Relief and for Damages.

Respectfully submitted,

A. BRIAN ALBRITTONUnited States Attorney

By: s/Josephine W. Thomas JOSEPHINE W. THOMASAssistant United States AttorneyFlorida Bar No. 31435400 North Tampa Street, Suite 3200Tampa, Florida 33602(813) 274-6086 - telephone(813) 274-6220 - facsimileE-mail: [email protected]

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CERTIFICATE OF SERVICE

I hereby certify that on August 30, 2010, I electronically filed the foregoing

with the Clerk of the Court by using the CM/ECF system which will send a notice

and copy of the electronic filing to the following:

Gregory Steven Hart 3428 Erhlich RoadTampa, Florida 33618

s/Josephine W. Thomas JOSEPHINE W. THOMASAssistant United States Attorney

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