IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO EASTERN DIVISION UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) CIVIL ACTION NO. 5:93CV2306 ) ONE DLO MODEL A/C, 30.06 ) JUDGE DAVID D. DOWD, JR. MACHINE GUN, etc., et al., ) ) Defendants, ) ) v. ) ) LOUIS EDWARD KATONA, III, ) ) Claimant. ) CLAIMANT'S MOTION FOR SUMMARY JUDGMENT Now comes Claimant Louis E. Katona, III, by undersigned counsel, and moves pursuant to Rule 56 of the Federal Rules of Civil Procedure for summary judgment in his favor and against the plaintiff on the grounds that there is no genuine issue as to any material fact and claimant is entitled to a judgment as a matter of law. A memorandum in support of this motion is attached hereto in compliance with Local Rules 2:2.1 and 8:8.1. JAMES H. JEFFRIES, III (North Carolina Bar No. 18502) 3019 Lake Forest Drive Greensboro, North Carolina 27408 Telephone: (910) 282-6024 Counsel for Claimant MEMORANDUM IN SUPPORT OF CLAIMANT'S MOTION FOR SUMMARY JUDGMENT This memorandum is submitted in compliance with Local Rules 2:2.1 and 8:8.1. On April 25, 1994, United States District Judge George W. White of this Court entered a judgment of acquittal on all counts of the indictment in favor of the defendant in United States v. Louis Edward Katona, III, Criminal No. 5:93CR275 (USDC N.D. Ohio, Eastern Division). True copies of that judgment and the Court's oral opinion are attached hereto as Exhibits A and B and incorporated herein by reference. The Court is respectfully requested to judicially notice its own records. The indictment against the defendant there (and claimant here) exactly tracked the complaint in this action.[FN1] The issues are, therefore, identical in both cases. The can be no genuine issue of fact as to the claimant's acquittal on all counts. Section 924(d)(1) of Title 18, United States Code, provides in pertinent part: Any firearm ... involved in or used in ... violation of any ... criminal law of the United States ... shall be subject to seizure and forfeiture and all provisions of the Internal Revenue Code of 1954 [sic - 1986][FN2] relating to the seizure, forfeiture, and disposition of firearms, as defined in section 5845(a) of that Code,[FN3] shall, so far as applicable, extend to seizures and forfeitures under the provisions of this chapter: Provided, That upon acquittal of the owner[FN4] or possessor,[FN5] ... the seized firearms ... shall be returned forthwith to the owner or possessor or to a person delegated by the owner or possessor.... This provision was added to Title 18 by the Firearms Owners' Protection Act of 1986[FN6] following extensive congressional findings of abuse by the Bureau of Alcohol, Tobacco and Firearms (hereafter "BATF") in seizing firearms and refusing to return them.[FN7] By the plain terms of the above-quoted language the claimant is entitled as a matter of law to the return of his firearms "forthwith." He is also entitled to a reasonable attorney's fee and to his taxable costs. Section 924(d)(2)(A) of Title 18, United States Code, expressly provides that In any action or proceeding for the return of firearms or ammunition seized under the provisions of this chapter, the court shall allow the prevailing party, other than the United States, a reasonable attorney's fee, and the United States shall be liable therefore. In this case, in order to achieve the return of his firearms, the defendant was required to defend an abortive, untimely and illegal administrative forfeiture attempt by the Bureau of Alcohol, Tobacco and Firearms, to file a claim and cost bond in another untimely administrative forfeiture attempt, to defend against an ill-founded and unproved indictment,[FN8] and to also defend against this action.[FN9] A failure by the claimant to have taken any one of these steps would automatically have resulted in forfeiture and destruction of the valuable firearms in question.[FN10] Claimant's firearms, with one exception, were seized on May 8, 1992, pursuant to a search warrant[FN11] based solely on a perjured affidavit by Bucyrus, Ohio, Chief of Police Joe Beran. Beran falsely denied signing the law enforcement certifications on the BATF transfer and registration forms registering the firearms to the claimant.[FN12] The single exception was a grenade launcher (Count 33 of the complaint in forfeiture) loaned to the BATF on April 26, 1991, for used in an unrelated criminal case against the manufacturer of the launcher in Oklahoma.[FN13] On July 22, 1992, BATF issued a notice of seizure and intent to administratively forfeit the 32 firearms seized on May 5, 1992. A true copy of that letter is attached as Exhibit 2 to claimant's affidavit in support of this motion. On September 9, 1992, claimant filed a claim and $2,500 cost bond with BATF. A true copy of the claim and cost bond is attached as Exhibit 3 to claimant's affidavit. By letter dated October 23, 1992, BATF returned claimant's cost bond with the enigmatic response that "It was not necessary to file a claim and cost bond on property in question. The matter will be handled by the judicial system. You will receive a complaint from the U.S. Attorney [sic] office." A true copy of this letter is attached as Exhibit 4 to claimant's affidavit. On June 8, 1993, BATF issued a second notice of seizure and intent to forfeit with respect to the Oklahoma grenade launcher. A true copy of that letter is attached to claimant's affidavit as Exhibit 5. On July 10, 1993, claimant posted a second claim and cost bond to prevent forfeiture of the grenade launcher.[FN14] The government's efforts to forfeit the claimant's firearms have been as ill-founded and bumbling as its attempt to prosecute him. The forfeiture attempts, both administrative and judicial, were untimely and barred by the statute of limitations. Section 924(d)(1) of Title 18, United States Code, expressly provides that "Any action or proceeding for the forfeiture of firearms or ammunition shall be commenced within one hundred and twenty days of such seizure."[FN15] Even if the initial BATF notice of intent to forfeit (dated July 22, 1992) had been legally operative as to the 32 firearms seized under the search warrant -- and it was not -- the notice came too late. The final claim date, after which BATF believed the firearms would have been administratively forfeited to the United States, was September 9, 1992,[FN16] one hundred and twenty-seven days after seizure and a week past the 120-day statute of limitation in 18 U.S.C. section 924(d)(1).[FN17] The final claim date set by BATF's notice of intent to forfeit the Oklahoma grenade launcher was even more delinquent. The launcher was obtained voluntarily from the claimant on April 26, 1991, with the promise it would be returned.[FN18] On April 22, 1992, the claimant was emphatically informed by a BATF agent that he would not be getting his launcher back.[FN19] And, of course, he never did. Regardless of when the date of "seizure" is calculated,[FN20] the proposed administrative forfeiture date by BATF was more than a year late. However, BATF's disregard of its own statutory processes in this case, while noteworthy, was simply irrelevant. The value of the seized firearms collection was well in excess of $100,000.[FN21] Given this value, BATF's attempted administrative forfeiture was a nullity. Section 7323(a) of the Internal Revenue Code of 1986 (Title 26, United States Code)[FN22] expressly provides for the judicial forfeiture of property seized under the revenue laws.[FN213] Section 7325 of the Code[FN24] then provides for a means of administrative forfeiture for goods valued at less than $100,000. The simple fact is that this firearms collection was never, because of its appraised value, legally subject to administrative forfeiture. The government was obligated from the outset to commence a judicial forfeiture proceeding, and to do it within 120 days of seizure. The complaint here was filed on October 28, 1993, more than a year late. The government never had a legitimate administrative forfeiture claim against these firearms, and after September 9, 1992, it never had any valid claim at all, judicial or otherwise. Nevertheless, because of the government's persistent -- if illegal -- attempts at forfeiture, coupled with BATF's policy of summary destruction after forfeiture (legal or otherwise), the defendant has never had any legal option but to counter each successive move by the government from the initial claim and cost bond through defense of the criminal action. For these reasons, claimant's "reasonable attorney's fee" covers the entire spectrum of defensive actions which were necessary to preserve his entitlement to the return of the firearms. Counsel for the claimant is in the process of gathering the necessary billing records for the fees incurred by claimant in his defense of these firearms and will promptly supply such documentation as required by the Court to support a judgment for attorney fees. CONCLUSION For all the foregoing reasons the Court should dismiss the government's complaint in forfeiture, order the return of claimant's firearms to him forthwith, and award the claimant his costs and a reasonable attorney's fee. Respectfully submitted, JAMES H. JEFFRIES, III (North Carolina Bar No. 18502) 3019 Lake Forest Drive Greensboro, North Carolina 27408 Telephone: (910) 282-6024 Counsel for Claimant CERTIFICATE OF SERVICE I, James H. Jeffries, III, counsel for the claimant, Louis Edward Katona, III, hereby certify that service of the foregoing Claimant's Motion for Summary Judgment and Memorandum in Support has been made upon the United States this 4th day of May, 1994, by mailing a true copy, postage prepaid, to James L. Morford, Esquire, Assistant United States Attorney, 1800 Bank One Center, 600 Superior Avenue, East, Cleveland, Ohio 44114-2600. JAMES H. JEFFRIES, III (North Carolina Bar No. 18502) 3019 Lake Forest Drive Greensboro, North Carolina 27408 Telephone: (910) 282-6024 Counsel for Claimant [FN1]. Judge Battisti, to whom the criminal case was originally assigned ordered the parties to eliminate the "signed-in-the-presence-of" language in each count of the original indictment as failing to constitute a crime. Judge White also rejected that aspect of the original indictment as reflected by his oral opinion granting a judgment of acquittal. Thus, the rejection of that aspect of the original indictment (repeated in the complaint here) is res judicata as to the same parties in this case, the United States and the claimant. [FN2]. See Section 2 of Public Law 99-514 of October 22, 1986: "The Internal Revenue Title enacted August 16, 1954, as heretofore, hereby, or hereafter amended, may be cited as the 'Internal Revenue Code of 1986'." [FN3]. All firearms involved in this action are "firearms" as defined in the National Firearms Act, 26 U.S.C. section 5845(a). The principal effect of this clause is to make the provisions of 26 U.S.C. sections 7301-7327 applicable to all firearms seized by the United States. [FN4]. The claimant is the undisputed owner as well as the legal registrant of all firearms in this case. See Exhibit C, claimant's affidavit, para. 1. [FN5]. Claimant was also the sole possessor of each of the defendant firearms before they were seized from him, or in one case, loaned to the Bureau of Alcohol, Tobacco and Firearms for use in evidence in an unrelated case. See claimant's affidavit, para. 2. [FN6]. Public Law No. 99-308, 100 Stat. 449 (May 19, 1986), amending the Gun Control Act of 1968. See also David T. Hardy, "The Firearms Owners' Protection Act: A Historical and Legal Perspective," 17 Cumberland Law Review 585 (1986-1987). [FN7]. Section 1 of the Act provides: The Congress finds that-- (1) the rights of citizens-- (A) to keep and bear arms under the second amendment to the United States Constitution; (B) to security against illegal and unreasonable searches and seizures under the fourth amendment; (C) against uncompensated taking of property, double jeopardy, and assurance of due process of law under the fifth amendment; and (D) against unconstitutional exercise of authority under the ninth and tenth amendments; require additional legislation to correct existing firearms statutes and enforcement policies.... See, e.g., 132 Congressional Record H1561 et seq.; 131 Cong. Rec. 16987, et seq.; Senate Report No. 583, 98th Cong., 2d Sess., 24 (1984). See also, Hardy, supra. [FN8]. The indictment explicitly invoked the forfeiture provision of the National Firearms Act, 26 U.S.C. section 5871. [FN9]. The claimant continues to maintain that the timing of this action by the government could only have resulted from a calculated attempt to harass and intimidate him while under indictment by the very same United States Attorney's office and to compel his verified claim and testimony while he was in criminal jeopardy. [FN10]. Section 5872 of the Internal Revenue Code of 1986 expressly provides that forfeited firearms may not be sold at public sale but shall be destroyed or sold to government entities. As a matter of policy, BATF routinely destroys such firearms as soon as they are declared forfeited. That such forfeiture and destruction would have been illegal (for the reasons discussed infra) does not alter the fact or necessity of defendant's compelled defensive reactions. To have passively permitted the illegal destruction of the firearms by the government would only have created a situation where the defendant's remedy would lie in extensive further litigation in the United States Court of Federal Claims or in Bivens-type actions against the individual federal officers involved -- neither alternative a satisfactory remedy nor an efficient use of the judicial process. We note that the Federal Tort Claims Act probably prohibits jurisdiction under the FTCA for such claims. See 28 U.S.C. section 2680(c). [FN11]. Case No. 1:92MG04048 (USDC N.D. Ohio) (Magistrate Judge Joseph W. Bartunek). [FN12]. Beran was the government's principal witness against the claimant/defendant at his criminal trial. Beran's testimony, even as bolstered by some 13 other government witnesses, was found insufficient to require a defense or submission of the case to the jury. Even the government's own handwriting examiner found that Beran probably signed 26 of the disputed 81 forms. [FN13]. See Exhibit 1 to claimant's affidavit. [FN14]. Exhibit 6 to claimant's affidavit. The second cost bond was in the amount of $350, which is statutorily incorrect. See 26 U.S.C. section 7325(3), infra. However, it was the amount required to be posted by BATF's forfeiture notice. BATF's seized property section was apparently operating under the mistaken notion that a provision of the fiscal year 1993 Treasury Department Appropriation Act, Public Law No. 102-393, 106 Stat. 1779 ("section 9703. Department of the Treasury Forfeiture Fund") had changed the statutory amount of bond required to be paid. See the instruction sheet in Exhibit 5 to claimant's affidavit. The government correctly did not attempt to assert that the mistaken bond sum is jurisdictional and has pleaded the Oklahoma grenade launcher into the jurisdiction of the Court. Complaint in Forfeiture, para. 73. [FN15]. See Cooper v. City of Greenwood, 904 F.2d 302 (5th Cir. 1990) (two cases), rehearing denied 912 F.2d 1465 (5th Cir. 1990) (table). Cf. United States v. Taylor, 975 F.2d 402 (7th Cir. 1992). [FN16]. See Exhibit 1 to claimant's affidavit. [FN17]. But see United States v. Twelve Miscellaneous Firearms, 816 F.Supp. 1316 (C.D. Ill. 1993) (two cases). [FN18]. See claimant's affidavit, para. 4. [FN19]. Ibid. [FN20]. A seizure of property occurs when "there is some meaningful interference with an individual's possessory interests in that property." United States v. Jacobsen, 466 U.S. 109, 113 (1984). [FN21]. "The defendant 33 firearms have an appraised value of approximately $107,000.00." Complaint in Forfeiture, para. 5. The case agent in claimant's prosecution (Kimmell) testified at trial that the appraised value of the firearms was $104,000 (not counting the Oklahoma grenade launcher). This is consistent with the claimant's own appraisals and is confirmed by BATF's return of claimant's cost bond with the advice that "This matter will be handled by the judicial system." Exhibit 4 to claimant's affidavit. [FN22]. section 7323. Judicial action to enforce forfeiture (a) Nature and venue.--The proceedings to enforce such forfeiture shall be in the nature of a proceeding in rem in the United States District Court for the district where such seizure is made. * * * * This is the section invoked by the government in its jurisdictional paragraph of the complaint, along with 26 U.S.C. section 5872. Complaint in Forfeiture, para. 1. [FN23]. The indictment charged violations of 26 U.S.C. sections 5848(b), 5861(l) and 5871. Likewise, the search warrant of May 8, 1992, under which the firearms were seized alleged violations of 26 U.S.C. sections 5861(b) and 5861(l). [FN24]. section 7325. Personal property valued at $100,000 or less In all cases of seizure of any goods, wares, or merchandise as being subject to forfeiture under any provision of this title which, in the opinion of the Secretary, are of the appraised value of $100,000 or less, the Secretary shall, except in cases otherwise provided, proceed as follows: (1) List and appraisement.--The Secretary shall cause a list containing a particular description of the goods, wares, or merchandise seized to be prepared in duplicate, and an appraisement thereof to be made by three sworn appraisers, to be selected by the Secretary who shall be respectable and disinterested citizens of the United States residing within the internal revenue district wherein the seizure was made. Such list and appraisement shall be properly attested by the Secretary and such appraisers. Each appraiser shall be allowed for his services such compensation as the Secretary shall by regulations prescribe, to be paid in the manner similar to that provided for other necessary charges incurred in collecting internal revenue. (2) Notice of seizure.--If such goods are found by such appraisers to be of the value of $100,000 or less, the Secretary shall publish a notice for 3 weeks in some newspaper of the district where the seizure was made, and requiring any person claiming them to appear and make such claim within 30 days from the date of the first publication of such notice. (3) Execution of bond by claimant.--Any person claiming the goods, wares, or merchandise so seized, within the time specified in the notice, may file with the Secretary a claim, stating his interest in the articles seized, and may execute a bond to the United States in the penal sum of $2,500, conditioned that, in case of condemnation of the articles so seized, the obligors shall pay all the costs and expenses of the proceedings to obtain such condemnation; and upon the delivery of such bond to the Secretary, he shall transmit the same, with the duplicate list or description of the goods seized, to the United States attorney for the district, and such attorney shall proceed thereon in the ordinary manner prescribed by law. (4) Sale in absence of bond.--If no claim is interposed and no bond is given within the time above specified, the Secretary shall give reasonable notice of the sale of the goods, wares, or merchandise by publication, and, at the time and place specified in the notice, shall, unless otherwise provided by law, sell the articles so seized at public auction, or upon competitive bids, in accordance with such regulations as may be prescribed by the Secretary.