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Global Prosperity Group > Andersen
v US
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
D.C. No. CV-01-08427-CAS
Appeal from the United States District Court for the Central District of California
Christina A. Snyder, District Judge, Presiding
Argued and Submitted
April 11, 2002 -- Pasadena, California
Filed July 30, 2002
Before: Stephen Reinhardt and Susan P. Graber,
Circuit Judges, and Roger L. Hunt,* District Judge.
Opinion by Judge Graber;
Dissent by Judge Reinhardt
COUNSEL
William A. Cohan, William A. Cohan, P.C., San Diego, California, for the plaintiffs-appellants.
Gretchen M. Wolfinger, Tax Division, U.S. Department of Justice, Washington,
D.C., for the defendants-appellees.
OPINION
GRABER, Circuit Judge:
Plaintiffs Andersen and LaMantia, on behalf of themselves and the members
of the Institute for Global Prosperity (IGP), sued the United States and its
agents. Plaintiffs alleged that the government conspired to violate their constitutional
rights and those of IGP's members when the government executed eight search
warrants and seized, among other things, IGP's membership lists and literature.
Plaintiffs moved for an injunction (1) to prevent the government from conducting
further searches or seeking further information, (2) to prevent the government
from using the information obtained from search warrants already executed,
and (3) to require the government to return the seized property. The district
court denied the motion. We dismiss Plaintiffs' appeal for lack of jurisdiction.
FACTS AND PROCEDURAL HISTORY
Plaintiffs are leaders of IGP, an organization that distributes "educational,
political, religious and philosophical materials in the form of books and CDs,
much of which is critical of the United States' financial and taxing policies." Plaintiffs
and other IGP leaders are currently under investigation1 for tax-related crimes.
Between February 28, 2001, and September 25, 2001, the government executed
eight search warrants on Plaintiffs' residences and on IGP offices across the
country. The warrants sought a broad range of financial records. The warrants
also sought material under the heading "[IGP] related records/evidence," including
applications for membership, membership cards, membership agreements, confidentiality
agreements, promotional literature (letters, flyers, brochures, videotapes
and audiotapes), scripts used during telephone solicitations, newspaper advertisements,
lists of names or addresses or telephone numbers (or other identifying data)
of members, prospective members or Qualified Retailers, records reflecting
attendance at
[IGP] seminars, videotapes/audiotapes of
[IGP] leaders/members at
[IGP] seminars, and audiotapes of
[IGP programs].
On September 28, 2001, Plaintiffs filed this action in federal district court,
alleging claims of (1) conspiracy to violate Plaintiffs' First and Fourth Amendment
rights and the First Amendment rights of members and associates of IGP and
(2) "willful, wanton and malicious violations" of Plaintiffs' individual
Fourth Amendment rights.
At the same time, Plaintiffs filed a motion for a temporary restraining order
and a preliminary injunction. They sought to prohibit the United States from
(a) conducting any further searches and seizures or otherwise seeking or acquiring
indicia of association with plaintiffs and/or IGP's members and/or associates;
and (b) any use or dissemination to any person, entity or agency whatsoever
of any membership and/or associates' identities or information already obtained
during the searches and seizures at issue . . . .
Plaintiffs also sought a permanent injunction ordering the return of all IGP-related
property that had been seized pursuant to the warrants.
The district court denied the request for a temporary restraining order and,
later, denied Plaintiffs' motion for a preliminary injunction. Plaintiffs timely
filed a notice of appeal.
DISCUSSION
As a threshold matter, we must decide whether we have jurisdiction to review
the district court's denial of the preliminary injunction.2 Generally, we may
review only final orders of the district court. 28 U.S.C. § 1291.
The denial of a preliminary injunction is one of the few kinds of appealable
interlocutory orders. 28 U.S.C. § 1292(a)(1). However, here, Plaintiffs'
motion sought relief typically provided by Federal Rule of Criminal Procedure
41(e). Although styled as an action for an "injunction," perhaps
because of the general rule noted above, the motion in substance sought the
return of property that had been seized pursuant to a warrant. Rule 41(e) controls
the procedure for obtaining that form of relief. The distinction between injunction
proceedings in general and Rule 41(e) motions in particular is important, because
the denial of a motion under Rule 41(e) usually is not appealable. DiBella
v. United States, 369 U.S. 121, 131-32 (1962)
The substance of the motion, not its form, controls its disposition. See Prudential
Real Estate Affiliates, Inc. v. PPR Realty, Inc., 204 F.3d 867, 880 (9th Cir.
2000) ("[T]he label attached to a motion does not control its substance." (citation
and internal quotation marks omitted)); Hasbrouck v. Texaco, Inc., 879 F.2d
632, 635 (9th Cir. 1989) ("The nomenclature the movant uses is not controlling.
This court must decide whether a motion, however styled, is appropriate for
the relief requested." (citations omitted)). In accordance with that principle
favoring substance over form, we have construed a motion that sought injunctive
relief of the kind provided by Rule 41(e) as a Rule 41(e) motion, notwithstanding
the motion's label. See, e.g., DeMassa v. Nunez, 747 F.2d 1283, 1291 (9th Cir.
1984) (Ferguson, J., dissenting), reh'g granted on other grounds, 770 F.2d
1505 (9th Cir. 1985) (per curiam) ( DeMassa I and DeMassa II, respectively).
Because Plaintiffs sought the relief provided by Rule 41(e), we construe their
motion as one properly brought under that rule.
The Supreme Court has held that the courts of appeal have jurisdiction to
review decisions on Rule 41(e) motions "[o]nly if the motion is solely
for return of property and is in no way tied to a criminal prosecution in esse
against the movant." DiBella, 369 U.S. at 131-32.3 As we recently recognized:
This rule reflects the careful balancing between two competing interests:
On the one hand, appellate courts should act to prevent the deprivation of
seized property that is sorely needed when those deprived have no other avenues
for relief. On the other hand, the appeal of a lower court's decision denying
a return of property can add uncertainty and delay to an ongoing parallel criminal
proceeding, especially if the legality of the search is the critical issue
in the criminal trial.
Bridges v. United States (In re 3021 6th Ave. N.), 237 F.3d 1039, 1041 (9th
Cir. 2001).
In this case, Plaintiffs' motion seeks the return of the seized property but
also asks for significant additional relief. And, there is an ongoing criminal
investigation that targets Plaintiffs. In the circumstances, Plaintiffs fail
both parts of DiBella's test, and they therefore cannot establish the exception
to the general rule that motions like theirs are unappealable.
As for the first criterion, in addition to demanding the return of their property,
Plaintiffs seek to enjoin the IRS from conducting any future searches or seizures.
Further, they seek to enjoin the IRS from using the material that already was
seized. By asking for exclusion of evidence and by seeking to prevent any further
searches, the complaint seeks relief beyond "solely" the return of
property.
As for the second criterion, an ongoing grand jury investigation constitutes
a "'criminal prosecution in esse' " under DiBella. DeMassa I, 747
F.2d at 1291 (Ferguson, J., dissenting) (quoting DiBella, 389 U.S. at 132).
In this circuit, rulings on motions for return of property are unappealable
when there is an ongoing grand jury investigation. Id.
Indeed, DeMassa I directly controls this case.4 In DeMassa I, we construed
a motion for a preliminary injunction as a Rule 41(e) motion. Because one of
the plaintiffs was the target of an ongoing grand jury investigation, we held
that we lacked jurisdiction to review the order denying injunctive relief.
See id. at 1287 (stating that "[t]his circuit has joined those courts
adopting a liberal definition of when a proceeding is in esse and has also
concluded that an order denying the return of seized property is not appealable
when a grand jury proceeding against the movant is underway").
DeMassa I clearly contemplates that grand jury proceedings constitute criminal
proceedings for the purpose of determining appealability. This interpretation
is consistent with DiBella, which held that "the mere circumstance of
a pre-indictment motion does not transmute the ensuing evidentiary ruling into
an independent proceeding begetting finality even for purposes of appealability.
Presentations before a . . . grand jury are parts of the federal prosecutorial
system leading to a criminal trial." DiBella, 369 U.S. at 131 (citations
omitted) (emphasis added).
Plaintiffs ask for an exception to the rule of nonappealability on the ground
that their First Amendment rights allegedly have been infringed. Although DiBella
and DeMassa dealt with Fourth Amendment rights, the broad proscription against
interlocutory review that those cases establish applies with equal force to
First Amendment claims.
We recognize that First Amendment rights may be chilled when the government
seizes information about the members of an organization. NAACP v. Alabama,
357 U.S. 449, 462-63 (1958). Nonetheless, for three reasons, we conclude that
the Supreme Court would apply the DiBella rule even to a First Amendment claim.
First, the Court's logic in DiBella retains its efficacy in this context.
The Court gave two reasons for refusing to create an exception to the general
finality rule: The Court was concerned with impeding the criminal justice process,
including the Sixth Amendment right to a speedy trial, 369 U.S. at 124, 126,
and it concluded that Rule 41(e) motions are not independent of the associated
criminal investigation and thus not severable from the "larger litigious
process," id. at 127 (citation and internal quotation marks omitted).
In other words, permitting an appeal from the district court's decision on
a Rule 41(e) motion is likely to affect the integrity of the investigation
and potential criminal trial. Id. These concerns are equally valid whatever
the specific nature of the constitutional right that the potential criminal
defendant seeks to vindicate.
Second, the bar against an interlocutory appeal means only that review on
the merits is postponed, not foreclosed. Plaintiffs can obtain appellate review
on the merits of their claims when the district court has taken final action,
either in the context of a criminal conviction or otherwise.
Third, we note by way of analogy the Supreme Court's application of a procedural
bar even in the face of substantial First Amendment claims. In United States
v. American Friends Service Committee, 419 U.S. 7 (1974) (per curiam), the
Supreme Court reversed an injunction that had been granted on First Amendment
grounds. Employees of the American Friends Service Committee, who were Quakers,
obtained an injunction that prevented the government from enforcing mandatory
tax-withholding requirements. Id. at 9. Because of their religious objection
to the war in Vietnam, the employees contended that the Free Exercise Clause
protected their right to express those beliefs by refusing to pay a portion
of their taxes. Id. at 7-8. Despite the strong First Amendment interests at
stake, the Court imposed a statutory bar against equitable relief. Construing
the Anti-Injunction Act, 26 U.S.C. § 7421(a),5 the Court reaffirmed the
principle that "the constitutional nature of a taxpayer's claim" under
the First Amendment was irrelevant to its analysis. Am. Friends, 419 U.S. at
11 (citation and internal quotation marks omitted).
We express no opinion on whether the Anti-Injunction Act would bar Plaintiffs'
suit on the merits; it is not clear whether it would or would not. See Church
of Scientology v. United States, 920 F.2d 1481, 1486 (9th Cir. 1990) (noting
that the Act extends to suits that target any activity that is "'intended
to or may culminate in the assessment or collection of taxes'" (quoting
Blech v. United States, 595 F.2d 462, 466 (9th Cir. 1979))). However, analogizing
from American Friends, we conclude that no exception to the procedural bar
may be made here on the ground that Plaintiffs assert First Amendment as well
as Fourth Amendment interests.
Although the dissent emphasizes the compelling nature of First Amendment claims,
our jurisdiction is bounded by the clear rule in DiBella, as interpreted by
this court in DeMassa. We are not free to ignore those precedents defining
our jurisdiction simply because the subject matter of the underlying complaint
tempts us to do so. That is true even in the Younger abstention context, on
which the dissent relies by analogy. See Younger v. Harris, 401 U.S. 37 (1971)
(limiting Dombroski v. Pfister, 380 U.S. 479 (1965), to its facts and abstaining
despite an underlying First Amendment claim).
CONCLUSION
Plaintiffs' motion for a preliminary injunction was, in substance, a motion
for return of property under Federal Rule of Criminal Procedure 41(e), but
it sought additional relief and was tied to an ongoing grand jury investigation.
Therefore, the district court's order denying the injunction is not a final,
appealable order, and we lack jurisdiction to review it.
APPEAL DISMISSED.
FOOTNOTES TO OPINION
*The Honorable Roger L. Hunt, United States District Court for the District
of Nevada, sitting by designation. 1At oral argument, the parties agreed
that we should assume for the purpose of decision that there is a grand jury
investigation
in progress. Although the government makes no factual representations on
this issue, we so assume. See Fed. R. Crim. P. 6(e) (providing for secrecy
of grand
jury proceedings). 2For jurisdictional purposes, we are obliged to determine
the finality of a decision on appeal. Regula v. Delta Family-Care Disability
Survivorship Plan, 266 F.3d 1130, 1136-37 (9th Cir. 2001). We review de
novo questions of our jurisdiction. Didrickson v. United States Dep't of
Interior,
982 F.2d 1332, 1337 (9th Cir. 1992). 3The dissent relies on two brief passages
in DiBella, 369 U.S. at 124-26, to argue that it "do[es] not set forth
an absolute rule prohibiting all interlocutory appeals in cases involving criminal
proceedings." Dissent at 10607. In the cited passages, however, the DiBella
Court was merely describing, as background, extant exceptions to the finality
rule, none of which applies here. The Court went on to state the applicable
and clear two-part test that we summarize in the text above. 369 U.S. at 131-
32. 4In DeMassa I, we held that we lacked jurisdiction to review the Fourth
Amendment claims of a lawyer whose offices had been searched and whose files
had been seized. Because that lawyer was the target of an ongoing grand jury
investigation, we concluded that DiBella controlled, and we had no jurisdiction.
747 F.2d at 1287. However, in DeMassa II, we held that we did have jurisdiction
to review the Fourth Amendment claims of the clients who were also individually
named plaintiffs. 770 F.2d at 1506. We reasoned that those clients were "strangers
to any potential indictments" and, thus, their claims were reviewable
under DiBella because there was no criminal proceeding in esse. Id. The clients
in DeMassa II were named plaintiffs in the action. By contrast, the IGP is
not a plaintiff, nor are any individual members named as plaintiffs except
Andersen and LaMantia. Andersen and LaMantia purportedly assert rights on the
membership's behalf. Without jurisdiction over any of Andersen's or LaMantia's
claims, however, we cannot assert jurisdiction over the membership's potential
derivative claims, even if Andersen and LaMantia otherwise would be entitled
to bring such claims in a representative capacity. 5Subject to certain statutory
exceptions not applicable here, the AntiInjunction Act provides that "no
suit for the purpose of restraining the assessment or collection of any tax
shall be maintained in any court by any person, whether or not such person
is the person against whom such tax was assessed." 26 U.S. C. § 7421(a).