Puerto 80 Projects, the owner of the Rojadirecta domain names seized by the US earlier this year, is currently awaiting the Southern District of New York’s ruling on its motion to dismiss. I took a look at its memorandum of law in support of the motion a few weeks ago. On August 26th, the US filed its own memo in response to the motion, and on September 2nd, Puerto 80 filed its reply to the US response, embedded below.
Separately, Puerto 80 has appealed the court’s earlier denial of its petition for pretrial release of the domain names under 18 USC § 983(f). The Second Circuit granted its request for an expedited appeal. Puerto 80’s appellate brief is due tomorrow.
Puerto 80’s reply memorandum:
[scribd id=63825861 key=key-1rncb6dg5nwje0ntnytg mode=list]
Puerto 80 sets the tone of its entire memo from the very start:
The government’s view of its powers under the civil forfeiture law, articulated for the first time in its opposition to Puerto 80’s motion to dismiss, is breathtaking. In the government’s view, it doesn’t need to allege that Puerto 80 violated any law, or even engaged in any civil wrong, in order to seize and shut down its Internet domain name. As long as the government thinks that someone, somewhere in the world, is engaged in copyright infringement, it believes it is entitled to seize any asset that might be connected to that infringement, whether or not the owner engaged in any wrongdoing, and whether or not that asset in fact “facilitated” the commission of any crime. And it further believes it is entitled to seize Internet domain names and shut down protected speech without ever having to prove that the speech was, in fact, unlawful, much less that the owner of the asset was responsible for any crime.
On the government’s view of its powers, it is entitled to seize the Google, Bing, or Yahoo web site, because someone, somewhere, has used those sites’ search engines to find infringing content. It is entitled to seize Verizon’s telephone network for the same reason. It is entitled to seize the power company, since numerous crimes are “facilitated” by the use of electricity. And the only reason the government lost the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713 (1971), is that it asserted the wrong statute. Had the government simply seized the New York Times’ printing presses, pointing out that they were being used to “facilitate” the disclosure of government secrets, it would have been able to block the disclosure of Daniel Ellsberg’s secrets.
This cannot be the law. The government’s effort to disaggregate seizure from any allegation of wrongdoing on the part of the property owner flies in the face of the purpose and history of the civil forfeiture statute. It is inconsistent with the way the statute itself is drafted. And it is unconstitutional.
There’s a couple of interesting statements made here that I want to look at.
“The government’s effort to disaggregate seizure from any allegation of wrongdoing on the part of the property owner flies in the face of the purpose and history of the civil forfeiture statute.”
I’m not sure what history Puerto 80 is referring to. Contrary to its assertions, civil forfeiture quite clearly and plainly does not require wrongdoing on the part of the property owner and has not required wrongdoing throughout its history.
In Bennis v. Michigan, the Supreme Court said “a long and unbroken line of cases holds that an owner’s interest in property may be forfeited by reason of the use to which the property is put even though the owner did not know that it was to be put to such use.” It then laid out this long and unbroken line of cases, beginning in 1827 with The Palmyra, which held that it is the thing that is the offender in an in rem forfeiture proceeding. Subsequent cases include:
- Harmony v. United States, 2 How. 210, 234 (1844): “whether he be innocent or guilty; and he impliedly submits to whatever the law denounces as a forfeiture attached to the ship by reason of their unlawful or wanton wrongs.”
- Dobbins’s Distillery v. United States, 96 U. S. 395, 401 (1878): “Cases often arise where the property of the owner is forfeited on account of the fraud, neglect, or misconduct of those intrusted with its possession, care, and custody, even when the owner is otherwise without fault . . . and it has always been held . . . that the acts of [the possessors] bind the interest of the owner . . . whether he be innocent or guilty.”
- J. W. Goldsmith, Jr.-Grant Co. v. United States, 254 U. S. 505 (1921): “It is the illegal use that is the material consideration, it is that which works the forfeiture, the guilt or innocence of its owner being accidental.”
- Van Oster v. Kansas, 272 U. S. 465 (1926): “It is not unknown or indeed uncommon for the law to visit upon the owner of property the unpleasant consequences of the unauthorized action of one to whom he has entrusted it.”
- Calero-Toledo v. Pearson Yacht Leasing Co., 416 U. S. 663 (1974): “the innocence of the owner of property subject to forfeiture has almost uniformly been rejected as a defense.”
After reviewing the solid precedent, and noting the punitive and deterrent functions of forfeiture, the Bennis court concluded, as it “concluded 75 years ago, that the cases authorizing actions of the kind at issue are ‘too firmly fixed in the punitive and remedial jurisprudence of the country to be now displaced.'”
Justice Thomas, in his concurrence to Bennis, could very well have been addressing Puerto 80 here when he noted that “One unaware of the history of forfeiture laws and 200 years of this Court’s precedent regarding such laws might well assume that such a scheme is lawless.”
Whether or not Puerto 80 is aware of the history of civil forfeiture law, it is still difficult to see how it can claim that forfeiture without an allegation of wrongdoing on the part of the property owner is “inconsistent with the way the statute itself is drafted.” The statute makes no reference to the culpability of the property owner. All that is required for property to be subjected to forfeiture is that it is “used, or intended to be used, in any manner or part to commit or facilitate the commission of an offense referred to in subparagraph (A).”
What’s more, 18 USC § 983 provides for an “innocent owner” defense — precluding the forfeiture of any property where the owner “did not know of the conduct giving rise to forfeiture; or upon learning of the conduct giving rise to the forfeiture, did all that reasonably could be expected under the circumstances to terminate such use of the property” — in any proceeding arising from a federal civil forfeiture statute. If forfeiture required wrongdoing on the part of the property owner, there would be no need to provide a specific defense for innocent property owners.
“On the government’s view of its powers, it is entitled to seize the Google, Bing, or Yahoo web site, because someone, somewhere, has used those sites’ search engines to find infringing content. It is entitled to seize Verizon’s telephone network for the same reason. It is entitled to seize the power company, since numerous crimes are “facilitated” by the use of electricity.”
The slippery slope argument Puerto 80 raises is one courts have heard before — and rejected. Said the Supreme Court in 1921:
The changes are rung on the contention, and illustrations are given of what is possible under the law if the contention be rejected. It is said that a Pullman sleeper can be forfeited if a bottle of illicit liquor be taken upon it by a passenger, and that an ocean steamer can be condemned to confiscation if a package of like liquor be innocently received and transported by it. Whether the indicated possibilities under the law are justified we are not called upon to consider. It has been in existence since 1866, and has not yet received such amplitude of application. When such application shall be made it will be time enough to pronounce upon it. 1JW Goldsmith-Grant v. US, 254 US 505, 512 (1921).
And again in 1996:
The dissent also suggests that The Palmyra line of cases “would justify the confiscation of an ocean liner just because one of its passengers sinned while on board.” None of our cases have held that an ocean liner may be confiscated because of the activities of one passenger. We said in Goldsmith-Grant, and we repeat here, that “[w]hen such application shall be made it will be time enough to pronounce upon it.” 2Bennis v. Michigan, 516 US 442, 450-51 (1996).
If Puerto 80 is concerned that this statute could be used to seize “Google, Bing, or Yahoo”, then it should call upon Congress to change the language accordingly. But a court is primarily concerned with the case in front of it, not some hypothetical worst-case scenario. And it’s worth pointing out that despite Puerto 80’s dire warnings, as well as those considered in the cases above, no court has yet to confront such a situation.
“And the only reason the government lost the Pentagon Papers case, New York Times Co. v. United States, 403 U.S. 713 (1971), is that it asserted the wrong statute. Had the government simply seized the New York Times’ printing presses, pointing out that they were being used to “facilitate” the disclosure of government secrets, it would have been able to block the disclosure of Daniel Ellsberg’s secrets.”
This is just a silly argument. Forfeiture of facilitating property can only occur pursuant to statute. The government couldn’t have asserted such a statute that Puerto 80 insinuates since there was no statute in 1971, nor now, that provided for the forfeiture of property that facilitates the disclosure of government secrets. Such an argument, laden with emotion but based on a faulty premise, might play well to the Techdirt crowd, but might not play as well to a judge.
“The Complaint fails to plead the elements of criminal copyright infringement by Puerto 80 or any other actor.”
For all its tough talk, Puerto 80 does very little to actually make its case.
To succeed in a forfeiture action under 18 USC § 2323, the government must prove by a preponderance of the evidence, that (1) the property was used to commit or facilitate the commission of criminal copyright infringement, and (2) there was a “substantial connection” between the property and the offense. The US does not have to show evidence of a particular illegal act. 3In re Seizure of all funds, 68 F.3d 577, 580 (2nd Cir. 1995), citing Marine Midland Bank, N.A. v. United States, 11 F.3d 1119, 1124 (2d Cir.1993); United States v. Ten Thousand Seven Hundred Dollars and No Cents in US Currency, 258 F. 3d 215 (3rd Cir. 2001); United States v. US Currency in Amount of $150,660, 980 F.2d 1200, 1205 (8th Cir. 1992); United States v. $250,000 in United States Currency, 808 F.2d 895, 899-900 (1st Cir.1987); United States v. $4,250,000, 762 F.2d 895, 903-04 (11th Cir.1985). And it may use circumstantial evidence to show the nexus between the property and the predicate act giving rise to forfeiture.
That’s the ultimate burden the US has to meet for property to be forfeited. At this stage in the game, the US need only “state sufficiently detailed facts to support a reasonable belief” that it will be able to meet this burden, 4FRCP, Supplemental Rules G(2). and “state the circumstances from which the claim arises with such particularity that the defendant or claimant will be able, without moving for a more definite statement, to commence an investigation of the facts and to frame a responsive pleading.” 5FRCP, Supplemental Rules E(2)(a).
In other words, the US doesn’t have to prove its case in the forfeiture complaint. It may even, in fact, “use evidence gathered after the filing of a complaint” to meet its ultimate burden.” 618 USC § 983(c)(2). Puerto 80 provides very little support for its argument that the forfeiture complaint is deficient in this regard — the first memorandum supporting its motion to dismiss focused on arguing that the site isn’t personally liable for criminal copyright infringement, and this memo primarily argues that the scope of the §2323 is simply too broad.
No word yet on when Judge Crotty is set to rule on Puerto 80’s motion.
References [ + ]
|1.||↑||JW Goldsmith-Grant v. US, 254 US 505, 512 (1921).|
|2.||↑||Bennis v. Michigan, 516 US 442, 450-51 (1996).|
|3.||↑||In re Seizure of all funds, 68 F.3d 577, 580 (2nd Cir. 1995), citing Marine Midland Bank, N.A. v. United States, 11 F.3d 1119, 1124 (2d Cir.1993); United States v. Ten Thousand Seven Hundred Dollars and No Cents in US Currency, 258 F. 3d 215 (3rd Cir. 2001); United States v. US Currency in Amount of $150,660, 980 F.2d 1200, 1205 (8th Cir. 1992); United States v. $250,000 in United States Currency, 808 F.2d 895, 899-900 (1st Cir.1987); United States v. $4,250,000, 762 F.2d 895, 903-04 (11th Cir.1985).|
|4.||↑||FRCP, Supplemental Rules G(2).|
|5.||↑||FRCP, Supplemental Rules E(2)(a).|
|6.||↑||18 USC § 983(c)(2).|