United States v. Sangeeta Mann , 897 F.3d 961 ( 2018 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 17-2060
___________________________
United States of America
lllllllllllllllllllllPlaintiff - Appellee
Trent Pierce
lllllllllllllllllllllIntervenor
v.
One Assortment of 93 NFA Regulated Weapons
lllllllllllllllllllllDefendant
Sangeeta Mann
lllllllllllllllllllllClaimant - Appellant
Randeep Mann; Sandip Mann
lllllllllllllllllllllClaimants
___________________________
No. 17-2489
___________________________
United States of America
lllllllllllllllllllllPlaintiff - Appellee
v.
One Interord Corporation, Model USAS-12, 12 Gauge Shotgun, Serial Number A0002089SA
lllllllllllllllllllllDefendant
Sangeeta Mann
lllllllllllllllllllllClaimant
Randeep Mann
lllllllllllllllllllllClaimant - Appellant
Trent Pierce; Sandip Mann
lllllllllllllllllllllClaimants
___________________________
No. 17-2490
___________________________
United States of America
lllllllllllllllllllllPlaintiff - Appellee
Trent Pierce
lllllllllllllllllllllIntervenor
v.
One Assortment of 93 NFA Regulated Weapons
lllllllllllllllllllllDefendant
Randeep Mann
-2-
lllllllllllllllllllllClaimant - Appellant
Sandip Mann
lllllllllllllllllllllClaimant
____________
Appeals from United States District Court
for the Eastern District of Arkansas - Little Rock
____________
Submitted: March 13, 2018
Filed: July 27, 2018
____________
Before WOLLMAN, SHEPHERD, and ERICKSON, Circuit Judges.
____________
SHEPHERD, Circuit Judge.
Following Dr. Randeep Mann’s federal conviction in the bombing of Dr. Trent
Pierce, the United States filed two civil forfeiture actions against weapons seized
from Dr. Mann during the criminal investigation. In the first action, the district court1
ordered forfeiture of an unregistered 12 gauge shotgun (“shotgun”) to the United
States.2 In the second, the district court denied forfeiture of 93 National Firearms Act
regulated weapons (“93 weapons”), but ordered the 93 weapons to be sold at auction
1
The Honorable Brian S. Miller, Chief Judge, United States District Court for
the Eastern District of Arkansas.
2
United States v. One Interord Corp. Model USAS-12, 12 Gauge Shotgun, No.
4:14CV00134 (BSM), 2017 WL 988128, at *3 (E.D. Ark. Mar. 14, 2017).
-3-
and the proceeds to be paid to Dr. Pierce.3 Dr. Mann appeals the first order granting
forfeiture, and both he and his wife, Sangeeta Mann, appeal the second order
disposing of the 93 weapons. We affirm.
I. Background
On February 4, 2009, Dr. Pierce, the then-chairman of the Arkansas State
Medical Board (“Board”), was severely and permanently injured by a bomb
consisting of a grenade concealed in a spare tire which was placed against his vehicle
outside his West Memphis, Arkansas home. Law enforcement identified Dr. Mann
as a potential suspect, as he was one of five doctors who had been disciplined by the
Board within the previous five years. By chance, on March 3, 2009, city workers
discovered 98 grenades buried in a wooded area near the Russellville, Arkansas home
Dr. Mann shared with his wife.
Law enforcement officers executed a search warrant on the Mann residence
where they discovered numerous weapons, including the shotgun and 93 National
Firearms Act regulated weapons, consisting of 76 machine guns, 10 silencers, 5 auto
sears, and 2 receivers. After determining several weapons—including the
shotgun—were not properly registered as required by law, officers seized the
unregistered firearms and arrested Dr. Mann. Following his arrest, the 93 weapons,
which were titled and registered in the name of Dr. Mann or his solely owned
company, remained at the Mann residence. Because only a Class III federal firearms
licensee can lawfully possess these weapons, the United States advised Mrs. Mann
she might be in unlawful possession. The United States later obtained a warrant and
seized the 93 weapons as evidence in Dr. Mann’s criminal case.
3
United States v. One Assortment of 93 NFA-regulated Weapons, No.
4:14CV00423 (BSM), 2017 WL 4570802, at *5 (E.D. Ark. Mar. 14, 2017).
-4-
A jury convicted Dr. Mann on seven charges: two involving the bombing, three
involving the illegal possession of weapons, and two involving obstruction of justice.
The jury did not, however, convict Dr. Mann for illegal possession of the shotgun.
The district court sentenced Dr. Mann to life imprisonment. In a separate criminal
proceeding, Mrs. Mann was also convicted on charges of obstructing justice in Dr.
Mann’s criminal case.
Dr. Mann appealed his conviction and sentence, which this Court mostly
affirmed. See United States v. Mann, 701 F.3d 274, 311 (8th Cir. 2012).4 He then
sought post-conviction relief under 28 U.S.C. § 2255. The district court denied his
claims, which included arguments that the United States perpetrated fraud on the
court by planting evidence and fabricating a story to obtain a search warrant for his
residence. Mann v. United States, No. 4:09CR00099 (BSM), 2016 WL 4500779, at
*4 (E.D. Ark. Aug. 26, 2016). The district court found these arguments were
procedurally defaulted because they were not presented on direct appeal and Dr.
Mann could not show prejudice or actual innocence. Id. Dr. Mann appealed, but this
Court declined to issue a certificate of appealability.
In a separate Arkansas civil action, Dr. Pierce obtained a judgment of
$122,500,000 against Dr. Mann for the injuries he sustained in the bombing. The
judgment was registered in Pulaski County, Arkansas, and a writ of execution was
issued directing the Pulaski County Sheriff to seize the 93 weapons. The writ was
served on the United States, but was returned non est.
Following Dr. Mann’s criminal convictions, the government filed two civil
forfeiture actions: one against the shotgun and one against the 93 weapons. During
4
This Court found Count 6 (possession of a machine gun in violation of 18
U.S.C. § 922(o)) was a lesser included offense of Count 5 (possession of an
unregistered machine gun in violation of 26 U.S.C. § 5861(d)) and so remanded the
two convictions with instructions to the district court to vacate one of them. Id.
-5-
discovery in both, Dr. Mann attempted to prove the United States perpetrated fraud
on the court in his underlying criminal case. In response, the United States obtained
a protective order in each forfeiture action, which quashed all discovery targeted at
developing Dr. Mann’s fraud on the court argument rather than exploring the facts of
possession for purposes of forfeiture.
In a bench trial based on stipulated facts, the district court ordered forfeiture
of the shotgun to the United States. The court found there was no proof of Dr.
Mann’s claim that a Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”)
officer told him he could possess the shotgun without registering it. Dr. Mann
appeals the forfeiture order.
In a separate bench trial, the district court denied forfeiture of the 93 weapons.
However, because Dr. Mann could not lawfully possess the weapons as a convicted
felon, the court ordered the weapons sold at auction. The court found Dr. Mann was
not entitled to the proceeds of the sale due to Dr. Pierce’s Arkansas civil judgment
against him. The court found Mrs. Mann lacked the requisite ownership interest to
establish standing to claim 50 percent of the proceeds of the sale. Thus, the district
court ordered 100 percent of the proceeds from the sale of the weapons to be paid to
Dr. Pierce in partial satisfaction of his civil judgment against Dr. Mann. Dr. and Mrs.
Mann both appeal.
II. Discussion
Dr. Mann first alleges the United States perpetrated fraud on the court in his
underlying criminal case. Had this fraud not occurred, he insists, the shotgun and 93
weapons would not have been seized and would therefore not be subject to forfeiture.
Dr. Mann also alleges the district court erred in both forfeiture actions by limiting the
discovery necessary to prove this fraud. Dr. Mann next challenges the district court’s
order granting forfeiture of the shotgun, claiming civil forfeiture is barred by his
-6-
acquittal on the charge of illegally possessing the shotgun. Finally, Dr. and Mrs.
Mann both attack the district court’s order granting Dr. Pierce 100 percent of the
proceeds from the sale of the 93 weapons. We consider each challenge in turn.
A.
This is the second time Dr. Mann has implored this Court to find the United
States committed fraud in procuring his criminal convictions. We once again decline
to do so.
In both forfeiture actions, Dr. Mann sought discovery to prove the United
States committed fraud on the court: specifically, that the United States planted the
grenades found near his home and fabricated a story about finding them in order to
obtain a search warrant for his residence. It was this fraud, Dr. Mann claims, that led
to the seizure of the shotgun and 93 weapons. The district court disagreed and issued
a protective order in each forfeiture action that limited discovery to the issue of
forfeiture. On appeal, Dr. Mann argues that the United States committed fraud and
the district court erred in limiting discovery.
We first consider Dr. Mann’s allegations of fraud, reviewing the district court’s
factual findings for clear error. See United States v. Hull, 606 F.3d 524, 526-27 (8th
Cir. 2010). The district court rejected Dr. Mann’s fraud on the court argument,
finding he presented “no credible evidence or court rulings” to substantiate his
claims. In fact, Dr. Mann raised the same fraud on the court argument—to no
avail—in his § 2255 action. There too, the district court rejected his claims, and this
Court denied a certificate of appealability. Because this Court has already considered
and denied these claims and Dr. Mann presents no persuasive new evidence here, we
find the district court did not clearly err in concluding there was no fraud that would
affect the two civil forfeiture actions.
-7-
We turn then to the limitations the district court placed on discovery. “A
district court has very wide discretion in handling pretrial discovery and this Court
is most unlikely to fault its judgment unless, in the totality of the circumstances, its
rulings are seen to be a gross abuse of discretion resulting in fundamental unfairness
in the trial of the case.” Hill v. Sw. Energy Co., 858 F.3d 481, 484 (8th Cir. 2017)
(internal quotation marks omitted).
The Federal Rules of Civil Procedure limit discovery to that which “is relevant
to any party’s claim or defense and proportional to the needs of the case.” Fed. R.
Civ. P. 26(b)(1). In determining the proper scope of discovery, a court should
consider “the importance of the issues at stake in the action, the amount in
controversy, the parties’ relative access to relevant information, the parties’ resources,
the importance of discovery in resolving the issues, and whether the burden or
expense of the proposed discovery outweighs its likely benefit.” Id.
In the forfeiture action against the shotgun, the district court found Dr. Mann’s
requested discovery—which was intended to prove fraud in his underlying criminal
case—“detract[ed] from the singular issue at hand”: whether the shotgun was subject
to forfeiture because Dr. Mann possessed it illegally. Indeed, because the forfeiture
action involved this single limited question as to the shotgun, Dr. Mann’s discovery
requests were not “proportional to the needs of the case.” Id. Moreover, because Dr.
Mann has already attempted—and failed—to prove this fraud on multiple occasions,
additional discovery would constitute nothing more than a fishing expedition. See
Hofer v. Mack Trucks, Inc., 981 F.2d 377, 380 (8th Cir. 1992) (holding Rule 26(b)
does not “allow fishing expeditions in discovery”). We thus conclude the district
court did not abuse its discretion in limiting discovery in that action.
We do not consider the limitations on discovery in the forfeiture action
involving the 93 weapons. The district court denied forfeiture of the 93 weapons, and
the United States did not appeal. Thus, Dr. Mann—as the prevailing party—cannot
-8-
now attack the discovery in that action. Cf. Morley Const. Co. v. Md. Cas. Co., 300
U.S. 185, 191 (1937) (finding that without a cross appeal, an appellee may not “attack
the decree with a view either to enlarging his own rights thereunder or of lessening
the rights of his adversary, whether what he seeks is to correct an error or to
supplement the decree with respect to a matter not dealt with below” (internal
quotation marks omitted)).
We therefore decline to overturn either order based on Dr. Mann’s allegations
of fraud and improper limitations on discovery.
B.
Dr. Mann next challenges the district court’s order granting forfeiture of the
shotgun. “On appeal of a forfeiture order, we review the district court’s factual
findings for clear error. Whether those facts establish that forfeiture is proper is a
mixed question of law and fact that we review de novo.” Hull, 606 F.3d at 526-27.
For the shotgun to be subject to civil forfeiture, the government must first
“establish probable cause” that the shotgun was possessed unlawfully. See United
States v. One 1982 Chevrolet Corvette Two-Door Auto., 976 F.2d 392, 392 (8th Cir.
1992). “[T]he burden [then] shifts to [Dr. Mann] to demonstrate by a preponderance
of the evidence that the [shotgun] is not subject to forfeiture.” Id. (internal quotation
marks omitted).
Dr. Mann did not register the shotgun when he purchased it because, at that
time, the National Firearms Act did not require him to do so. However, in March
1994, the ATF issued a ruling that held this type of shotgun is not “particularly
suitable for sporting purposes” because its “weight, size, bulk, designed magazine
capacity, configuration, and other factors indicate that [it] is a semiautomatic version
of a military-type assault shotgun.” ATF Rul. 94-1, 1994-1 A.T.F.Q.B. 19 (1994).
-9-
Accordingly, the ATF held the shotgun qualifies as a “destructive device” under the
National Firearms Act pursuant to 26 U.S.C. § 5845(f)(2). Id. Unregistered
possession of the shotgun is therefore unlawful. 26 U.S.C. § 5861(d).
It is uncontested that Dr. Mann possessed the shotgun without registering it,
so there is no doubt that the shotgun was unlawfully possessed. See id. Dr. Mann
argues, however, that he failed to register the shotgun based on the advice of an
unidentified ATF agent. Thus, he claims, the shotgun is not subject to forfeiture
because he has an affirmative defense: estoppel by entrapment. See United States v.
Ray, 411 F.3d 900, 903 (8th Cir. 2005) (“In order to present a defense of estoppel by
entrapment, [the defendant] would have to show that the government assured him that
certain conduct was legal and that he initiated or continued that conduct because he
reasonably relied on the government’s statement.”).
At his criminal trial, Dr. Mann raised this same defense. The jury later
acquitted him of illegal possession of the shotgun. In the civil forfeiture action,
however, the district court rejected Dr. Mann’s defense. Dr. Mann argues on appeal
that the district court was collaterally estopped from reaching a different conclusion
on his estoppel by entrapment defense than the jury because the defense required the
same burden of proof in both his criminal trial and the civil forfeiture action: a
preponderance of the evidence. Thus, he claims, his acquittal in the criminal case
bars civil forfeiture.
In this forfeiture action, the district court found the jury’s verdict carried “little
weight” because the standard of proof in the criminal trial was beyond a reasonable
doubt, while the standard in the civil forfeiture proceeding is a preponderance of the
evidence. Moreover, the court found Dr. Mann’s collateral estoppel argument
unpersuasive because although the jury was instructed it could acquit Dr. Mann based
on his affirmative defense, there were multiple theories upon which the jury could
acquit, and the jury did not provide a specific reason for acquittal.
-10-
Indeed, it is well settled that collateral estoppel does not bar a “civil, remedial
forfeiture proceeding initiated following an acquittal on related criminal charges.”
See United States v. One Assortment of 89 Firearms, 465 U.S. 354, 361-62 (1984)
(holding acquittal on a gun charge did not bar subsequent forfeiture of the gun). That
is because “the difference in the burden of proof in criminal and civil cases precludes
application of the doctrine of collateral estoppel.” One Lot Emerald Cut Stones v.
United States, 409 U.S. 232, 235 (1972). “The acquittal of the criminal charges may
have only represented an adjudication that the proof was not sufficient to overcome
all reasonable doubt of the guilt of the accused.” Id. (internal quotation marks
omitted). “[I]t does not constitute an adjudication on the
preponderance-of-the-evidence burden applicable in civil proceedings.” Id.
As the district court noted, the jury did not provide a specific reason for
acquittal. Thus, we do not know that the jury acquitted Dr. Mann based on his
affirmative defense. We know only that the jury did not find Dr. Mann guilty beyond
all reasonable doubt as to the illegal possession charge. And moreover, the Supreme
Court has instructed that “[w]e need not be concerned whether the jury decided to
acquit [Dr. Mann] because he was entrapped . . . or whether the jurors were not
convinced of his guilt beyond a reasonable doubt for other reasons.” One Assortment
of 89 Firearms, 465 U.S. at 361-62. “In either case, the jury verdict in the criminal
action [does] not negate the possibility” of Dr. Mann’s guilt under the preponderance
of the evidence standard here. Id. at 362. Dr. Mann’s acquittal in his criminal trial,
therefore, does not bar the district court from rejecting his affirmative defense and
ordering forfeiture of the shotgun in this civil proceeding.
We thus conclude the district court did not err in granting forfeiture of the
shotgun.
-11-
C.
Finally, Dr. and Mrs. Mann both challenge the district court’s distribution of
the proceeds from the sale of the 93 weapons.5 After denying forfeiture, the district
court set about the task of disposing of the weapons, which remained in the
possession of the United States. Having found the United States was not entitled to
the weapons, the court could not simply return them to Dr. Mann because, as a
convicted felon, he was prohibited from possessing such weapons under 18 U.S.C.
§ 922(g). Moreover, Dr. Mann is currently serving a life sentence in federal prison.
Thus, the district court ordered the weapons to be sold at auction. Neither Dr. nor
Mrs. Mann challenge the court’s order directing the sale of the weapons. They do,
however, challenge the court’s decision to distribute 100 percent of the proceeds of
that sale to Dr. Pierce in partial satisfaction of his multimillion-dollar Arkansas
judgment against Dr. Mann for injuries sustained in the bombing. Dr. Mann claims
the district court erred in relying on that state court judgment, which precluded him
from receiving the proceeds. Mrs. Mann seeks 50 percent of the proceeds, claiming
the district court erred in finding she lacked the requisite ownership interest to
establish standing. Having considered all asserted interests, we affirm the district
court’s distribution of the proceeds from the sale of the 93 weapons.
We must first satisfy ourselves that the district court had jurisdiction to dispose
of the 93 weapons. The district court clearly had subject matter jurisdiction over the
forfeiture action. 28 U.S.C. §§ 1345, 1355. After denying forfeiture, the district
court had “equitable authority . . . to order [the] law enforcement agency to turn over
[the] property it ha[d] obtained during the [criminal] case to the rightful owner or his
designee.” Henderson v. United States, 135 S. Ct. 1780, 1784 (2015). Because Dr.
5
Dr. and Mrs. Mann also raise arguments concerning the court’s denial of
forfeiture. But, we do not consider whether forfeiture was properly denied as the
United States did not appeal the order. See Morley Const. Co., 300 U.S. at 191.
-12-
Mann—the rightful owner—could not lawfully possess the weapons as a convicted
felon, 18 U.S.C. § 922(g), the district court had equitable power to grant Dr. Mann’s
request that the weapons be transferred to a third party for sale. Resp. to Mot. to
Authorize Forfeiture at 6; see Henderson, 135 S. Ct. at 1786-87 (finding federal court
has “equitable power to accommodate the felon’s request” that guns seized during a
criminal investigation be transferred “to a firearms dealer . . . for subsequent sale”).
Further, because Dr. Mann requested the proceeds from the sale be used to pay his
outstanding debts, Resp. to Mot. to Authorize Forfeiture at 6, and Dr. Pierce was the
only claimant asserting an interest in the weapons based on an outstanding debt, the
district court had equitable power to order the proceeds be given to Dr. Pierce, cf.
Henderson, 135 S. Ct. at 1786-87.
We turn, then, to the issues on appeal. Mrs. Mann argues the district court
erred in granting her interest in the proceeds to Dr. Pierce. She asserts a 50 percent
interest in the weapons based on her claim that the weapons were purchased with
marital funds. The district court rejected Mrs. Mann’s asserted interest in the
weapons in reaching its conclusion that she lacked standing to contest forfeiture.
Because the issue of forfeiture is not before us on appeal, we do not review the
court’s determination on standing. We consider only whether Mrs. Mann has an
ownership interest in the weapons that would entitle her to any proceeds of their sale.
See Ballinger v. Culotta, 322 F.3d 546, 548 (8th Cir. 2003) (“We may affirm the
district court’s judgment on any ground supported by the record.”).
Arkansas law defines marital property as “all property acquired by either
spouse subsequent to the marriage.” Ark. Code Ann. § 9-12-315(b). Such property
generally must be divided equally between spouses upon divorce.
§ 9-12-315(a)(1)(A). But Arkansas law is clear that “the law regarding marital
property does not apply in situations other than divorce.” Cloud v. Brandt, 259
S.W.3d 439, 443 (Ark. 2007); Ellis v. Ellis, 868 S.W.2d 83, 84 (Ark. 1994) (“Nothing
in [§ 9-12-315] suggests the legislature intended this provision to have any effect
-13-
except with respect to divorce.”). Thus, Mrs. Mann cannot rely on the law of
Arkansas marital property to establish an ownership interest in the 93 weapons.
Mrs. Mann raises no other relevant claim of ownership interest in the weapons,
which were titled and registered in the name of her husband or his solely owned
company and were possessed by the United States. We therefore conclude Mrs.
Mann has no ownership interest in the weapons and thus is not entitled to any
proceeds from their sale.
Dr. Mann likewise argues the district court erred in granting his interest in the
proceeds to Dr. Pierce. In doing so, the district court relied on Dr. Pierce’s Arkansas
civil judgment against Dr. Mann. Dr. Mann attacks the state court judgment,
claiming the Arkansas Supreme Court improperly applied offensive collateral
estoppel, relying on his criminal conviction without allowing him the discovery
necessary to develop his fraud on the court argument.
The Arkansas civil judgment was affirmed by the Arkansas Supreme Court and
is final. Mann v. Pierce, 505 S.W.3d 150, 155 (Ark. 2016). “[T]he United States
District Court is without authority to review final determinations of the [Arkansas
Supreme Court] in judicial proceedings. Review of such determinations can be
obtained only in [the United States Supreme] Court.” D.C. Court of Appeals v.
Feldman, 460 U.S. 462, 476 (1983). Moreover, “[t]he Full Faith and Credit Act, 28
U.S.C. § 1738 . . . requires the federal court to give the same preclusive effect to a
state-court judgment as another court of that State would give.” Exxon Mobil Corp.
v. Saudi Basic Indus. Corp., 544 U.S. 280, 293 (2005) (internal quotation marks
omitted); Mills v. Duryee, 11 U.S. 481, 484 (1813) (finding a state court judgment is
conclusive evidence of a debt). Thus, the district court did not err in relying on the
Arkansas civil judgment in granting Dr. Mann’s interest in the proceeds to Dr. Pierce.
-14-
We therefore conclude the district court did not err in ordering the proceeds
from the sale of the weapons to be given to Dr. Pierce.
III. Conclusion
For these reasons, we affirm the district court’s order granting forfeiture of the
shotgun, as well as the district court’s disposition of the 93 weapons.
______________________________
-15-