United States District Court, D. Utah, Central Division
MEMORANDUM DECISION AND ORDER GRANTING DEFENDANT
UNITED STATES' MOTION TO DISMISS
S. Jenkins United State District Judge
United States of America has moved to dismiss CFK, LLC's
Fed. R. Crim. P. 41(g) motion for return of $746, 798.32 in
funds seized by the government. Plaintiff CFK opposed the
motion. The Government argues that the Court
should dismiss CFK's motion because once the government
filed a civil forfeiture complaint CFK could no longer show
that it lacked an adequate legal remedy as required to obtain
equitable relief under Rule 41(g). The Government further
argues that when CFK gained an adequate legal remedy to
address its claims to the seized funds that this Court no
longer had jurisdiction to grant CFK, equitable
relief. CFK argues that because the government
delayed filing its civil forfeiture the court retains
jurisdiction under United States v. Floyd, 860 F.2d
999 (10th Cir. 1988). CFK further argues that even if the
court lacks jurisdiction under Rule 41(g), it retains
jurisdiction under 18 U.S.C. § 981(b)(3).
reasons set forth herein, the court GRANTS the United
States' motion for dismissal and DENIES WITHOUT PREJUDICE
Plaintiff CFK's motion for return of property.
Defense Criminal Investigative Service ("DOS")
initiated an investigation into a health care fraud involving
CFK, LLC. As part of its investigation, DCIS seized $746,
798.32 from a Wells Fargo Bank account in the name of CFK
pursuant to a seizure warrant issued in the Southern District
of California on January 21, 2016. That same day agents
executed a search warrant in Utah at a pharmacy operated by
CFK. On June 13, 2017, CFK filed a motion under Fed. R. Crim.
P. 41(g) seeking the return of the seized
funds. The court initially scheduled oral
argument on the merits of CFK's motion for November 29,
2017. One day before the hearing on the merits,
on November 28, 2017, the government filed a civil forfeiture
complaint in the Southern District of California naming the
seized funds sought for return in this case as a
defendant. The court rescheduled the hearing on the
merits for January 18, 2018. On December 19, 2017, the United
States filed its motion to dismiss for lack of
jurisdiction. On January l8, 2018;The court heard oral
argument on the motion to dismiss.
41(g) motion seeking return of seized property is an
equitable action. Whether to exercise jurisdiction under Rule
41(g) is based on equitable principles. Frazee v,
I.R.S., 947 F.2d 448, 449 (loth Cir.
1991). Equitable relief under Rule 41(g) is
only available if a movant "can show irreparable harm
and an inadequate remedy at law." United States v.
Copeman, 458 F.3d 1070, 1071 (10th Cir. 2006).
Jurisdiction under Rule 41(g) "should be exercised with
caution and restraint." Floyd, 860 F.2d at
CFK, LLC cannot show that it has an inadequate remedy at law
and so the court agrees with the United States that it must
dismiss CFK's motion. When the government filed its civil
forfeiture complaint against the seized funds CFK seeks, CFK
could no longer show that it lacked a legal remedy. A civil
forfeiture proceeding provides an adequate legal remedy.
See United States v. Akers, 215 F.3d 1089, 1106
(10th Cir. 2000) (civil forfeiture provided adequate remedy;
no need for a motion for return of property once the
forfeiture proceeding was filed); Frazee, 947 F.2d
at 449-50 ("That remedy is adequate because the legality
of the seizure may be tested in a judicial forfeiture.")
assertion, that Floyd supports its argument that the
court retains jurisdiction incorrect.
The Floyd court considered whether an administrative
forfeiture provided an adequate remedy requiring dismissal of
the motion for return of property. Floyd, 860 F.2d
at 1003-04. The Floyd court held that it did not in
that case because, while the government intended to proceed
with an administrative forfeiture, it had not completed the
required steps to do so by the time of the Rule 41 hearing.
See Id. at 1004 (the government had not published
statutory notice of the administrative forfeiture). The
scenario in Floyd is not the one facing this court.
contrast, Frazee provides a direct analogue because
that case involved the same circumstance facing this court:
the filing of a civil forfeiture after the filing of a Rule
41(g) motion for return of property, but before a hearing on
the motion's merits. Id. at 449. Frazee
also distinguished Floyd in the same manner as
Unlike the claimant in Floyd... the Frazees had a
remedy available to challenge the seizure at the
time of the Rule 41(e) hearing. That remedy is adequate
because the legality of a seizure may be tested in a judicial
Id. at 450 (emphasis added). Once the government
filed its civil forfeiture, CFK obtained an adequate remedy
at law and it is irrelevant that it filed its equitable
motion for return of property first. See, e.g.,
Matter of Search of Premises Known as 6455 S. Yosemite,
Englewood, Colo., 897 F.2d 1549, 1556 n.6 (10th Cir.
1990) (noting that even if a motion for return of property
were pending before an indictment's return, upon
indictment "an adequate legal remedy is available in the
district court with jurisdiction Over the indictment and
equitable jurisdiction is no longer necessary or
proper."); Shaw v. United States, 891 F.2d 602,
603 (6th Cir. 1989) (even though a claimant filed a motion
for return of property before criminal charges were brought
against her, once the government instituted a civil
forfeiture she could not prefer the equitable remedy over the
legal remedy provided to her through the civil proceedings);
$8, 050.00 in U.S. Currency v. United States, 307
F.Supp.2d 922, 926-27 (N.D. Ohio 2004) (comprehensive
provisions enacted by CAFRA in section 983(a) give claimant
an adequate remedy at law for contesting a civil forfeiture;
thus, once the Government commences administrative
forfeiture, the Rule 41(g) motion must be dismissed;
claimant's argument that he filed his motion first is
without merit); In re The Seizure of All Funds...National
Electronics, Inc., No. M-18-65, 2005 WL 2174052, at *2
(S.D.N.Y. 2005) (unpublished)
CFK's reliance on 18 U.S.C. § 981(b)(3) is also
misplaced. That section does not convey this court with
independent jurisdiction to hear a motion for return of
property. Section 981(b)(3) merely provides for where
claimants may properly file a motion for return of property.
It does not itself authorize the filing of such a motion.
Instead, only Rule 41(g) authorizes the filing of motions for
return of property. See Tucker v. United States, No.
14CV01795, 2014 WL 7506803, at *1 (CD. Cal. Dec. 15, 2014)
(deeming that claimants' motion for return of property
was under Rule 41(g) and not under 18 U.S.C. § 981(b)(3)
as argued by claimants because Section 981(b)(3) "only
describes where such a motion should be filed").
CFK will have an opportunity to make any challenges regarding
the government's seizure of the $746, 798.32 in the civil
forfeiture proceeding. The motion in this case served its
purpose by prompting the government to file its civil
forfeiture complaint. See United States v. Eight Thousand
Eight Hundred & Fifty Dollars ($8, 850) in U.S.
Currency,461 U.S. 555, 569 (1983) (noting ...