USCA1 Opinion
March 29, 1996
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 95-1923
No. 95-2016
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
ALL FUNDS, MONIES, SECURITIES, MUTUAL FUND SHARES AND STOCKS
HELD IN FIDELITY INVESTMENTS, ET AL.,
Defendant, Appellee.
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THOMAS E. KNEELAND, JR.,
Defendant, Appellant.
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APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. William G. Young, U.S. District Judge]
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Before
Torruella, Chief Judge,
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Stahl and Lynch, Circuit Judges.
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Thomas E. Kneeland, Jr. on brief pro se.
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Donald K. Stern, United States Attorney, and Patrick M. Hamilton,
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Assistant United States Attorney, on brief for appellee, United States
of America.
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Per Curiam. These consolidated appeals have their
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origin in a civil forfeiture action which was dismissed
without prejudice, on the government's motion, pursuant to
Fed. R. Civ. P. 41(a)(2). Claimant Thomas Kneeland
challenges the dismissal; the denial of various pre-dismissal
motions, including his requests for an adversarial hearing or
entry of judgment in his favor; and the denial of various
post-dismissal motions, including a renewed motion for
summary judgment, a motion for return of property, a motion
to disqualify the district judge, and a motion for judgment
on the pleadings.1 For the following reasons, we affirm.
1
Kneeland allegedly operated an advance fee scheme
whereby he fraudulently promised potential borrowers that he
could obtain funding for their projects, accepted substantial
up-front fees, failed to arrange financing or to return the
fees, and subsequently "laundered" the fees. On December 2,
1993, the government received ex parte warrants authorizing
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seizure of the defendant properties after persuading a United
States Magistrate Judge that there was probable cause to
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1The parties dispute the scope of our jurisdiction.
1
Kneeland claims to have appealed eight separate orders by way
of eight notices of appeal, whereas the government correctly
points out that Kneeland filed only two notices of appeal.
We need not resolve what issues are properly before us.
Assuming without deciding that we have jurisdiction to review
each of the challenged orders, we would affirm. See Norton
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v. Matthews, 427 U.S. 524, 530-32 (1976) (explaining that
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jurisdictional inquiry may be bypassed where merits can be
easily resolved in favor of the party challenging
jurisdiction).
believe that they were involved in or traceable to money
laundering. Thereafter, the government initiated
administrative forfeiture proceedings and Kneeland filed a
claim of ownership. On March 30, 1994, a federal grand jury
returned an indictment charging Kneeland with conspiracy,
mail fraud, wire fraud, money laundering and criminal
forfeiture. The forfeiture count specifically identified the
defendant properties. On May 6, 1994, the government filed
the instant civil complaint for forfeiture pursuant to 18
U.S.C. 981(a)(1)(A).
For a period of time, the civil and criminal cases
progressed forward in tandem. The criminal case readied for
trial. In the civil case, Kneeland filed an answer to the
complaint. Back Bay, Ltd., an alleged victim, filed a late
claim. On October 20, 1994, less than three weeks before the
criminal trial was scheduled to take place, the government
moved to stay discovery in the civil case pending the
disposition of the criminal matter. Kneeland did not object
to this request, and it was allowed. The criminal trial,
however, was delayed, and eventually it was rescheduled to
take place on May 22, 1995.
On December 27, 1994, while the stay was in effect,
Kneeland filed a motion for summary judgment in his favor on
the alleged ground that he was the only person to "perfect a
claim" to the defendant properties. The motion was summarily
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denied. Thereafter, Kneeland moved to lift the stay and
renewed his motion for summary judgment. These motions were
denied. On April 24, 1995, Kneeland again moved to lift the
stay, this time requesting a hearing on the merits of the
seizure. This motion was followed by similar motions, filed
approximately every two or three days, seeking, inter alia,
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dismissal of the complaint, an adversarial hearing, or
summary judgment. On June 20, 1995, the district court
granted Kneeland's motion to lift the stay, but otherwise
denied his various motions. By that time, the criminal trial
had been delayed once again.
The government immediately filed a motion to dismiss the
civil case without prejudice. On or about the same date, the
government moved in the criminal case for new warrants
freezing the defendant properties. Kneeland filed an
"omnibus" motion objecting to the dismissal and seeking entry
of judgment in his favor. A week later, he filed a motion
for adversarial hearing or entry of judgment. On July 18,
1995, the district court allowed the motion to dismiss and
denied the "omnibus" motion. On July 20, 1995, the court
denied the motion for adversarial hearing or entry of
judgment. Thereafter, Kneeland filed, inter alia, a renewed
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motion for summary judgment, a motion for return of defendant
properties, a motion to vacate the dismissal and to
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disqualify the district judge under 28 U.S.C. 455(a), and a
motion for judgmenton thepleadings. Thesemotions weredenied.
A plaintiff's motion for dismissal without prejudice
pursuant to Fed. R. Civ. P. 41(a)(2) should be allowed unless
the court finds that the defendant will suffer plain legal
prejudice. 9 Charles A. Wright & Arthur R. Miller, Federal
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Practice & Procedure 2364, at 280 (2d ed. 1994). The
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decision whether or not to grant such a dismissal is within
the sound discretion of the district court and reviewable
only for abuse of discretion. See Puerto Rico Maritime
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Shipping Authority v. Leith, 668 F.2d 46, 49 (1st Cir. 1981).
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We find no such abuse of discretion here.
As an initial matter, we reject Kneeland's suggestion
that he was robbed of an imminent victory. See Grover v. Eli
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Lilly & Co., 33 F.3d 716, 718-19 (6th Cir. 1994) (finding
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abuse of discretion where district court dismissed case at
the point where the law clearly dictated a result for the
defendant). Indeed, Kneeland's argument that he was entitled
to judgment in his favor because the government is a mere
"escrow agent" for potential claimants is utterly frivolous
even if we assume arguendo that Kneeland was the only
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claimant. The government in a civil forfeiture action under
the money laundering statutes is not an escrow agent for
others; rather, if successful, it acquires title to the
forfeited property. See 18 U.S.C. 981(a),(f).
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We also reject Kneeland's argument that he was deprived
of his right to an adversarial hearing. Certainly, before
forfeiture, a claimant must be afforded an opportunity to
rebut the government's showing of probable cause, see United
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States v. Real Property Known & Numbered as Rural Route 1,
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Box 137-B, Cutler, Ohio, 24 F.3d 845, 848-49 (6th Cir. 1994),
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as well as to present evidence bearing on other potential
defenses. However, it doesn't follow that a civil forfeiture
action, once begun, may not be aborted. In the instant case,
the dismissal obviated the need for a hearing.2
2
Finally, we add that the civil case was still in the
pre-discovery stage. Although Kneeland claims to have
devoted many hours to the case, the record reveals that much
of his efforts were spent on frivolous, repetitious motions.
Kneeland had gained no ground in the civil case which he lost
by the dismissal. Indeed, Kneeland benefited from not having
to litigate two actions simultaneously, and from certain
procedural advantages he had in the criminal proceeding. See
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David B. Smith, Prosecution & Defense of Forfeiture Cases
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1.03 (1995) (discussing, by contrast, the tremendous
procedural advantages the government enjoys in a civil
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2Kneeland's suggestion that he was denied due process
2
because he was not afforded a "timely" post-seizure hearing
also fails. Kneeland did not object to the government's
motion for a stay; and while the stay was in effect, the
government diligently prosecuted the related criminal
indictment.
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forfeiture action). The criminal case was procedurally
advanced and the government ready for trial. Under the
circumstances, we think the district court properly allowed
the government's motion to dismiss the civil case.
We have carefully considered Kneeland's remaining
arguments and reject them as without merit. In particular,
we find no error in the denial of his post-dismissal motion
for return of property since the assets were then being held
in connection with his criminal case.3 We also find no
3
error in the denial of the motion for disqualification. The
district court's comments in its order vacating the stay do
not warrant an inference that it stepped outside its role to
act as adviser to the government, and we find no evidence of
bias in any of the court's rulings or in its handling of the
case. See Liteky v. United States, 114 S. Ct. 1147, 1157
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(1994) (observing that judicial rulings alone almost never
constitute valid basis for a bias or partiality motion).
Affirmed.
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3Contrary to Kneeland's suggestion, there is no evidence
3
that the district court held a "transfer hearing" or was
otherwise involved in the decision to issue new seizure
warrants.
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