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Fosnight v. Jones

United States District Court, S.D. Indiana, New Albany Division

December 4, 2019




         Ronald David Fosnight II owns Paraklese Technologies, Inc. (“Paraklese”), which manufactures “solvent traps”[1] and other firearm-related devices. On June 20, 2017, several Bureau of Alcohol, Tobacco, and Firearms (“ATF”) Agents and Indiana State Police (“ISP”) Officers executed a search of Paraklese's facility and seized Plaintiffs' solvent trap inventory. On June 19, 2019, Mr. Fosnight and Paraklese initiated this lawsuit. On September 23, 2019, the named Defendants filed their Motion to Dismiss, [Filing No. 11], which is now ripe for the Court's decision.


         Standard of Review

         Under Rule 12(b)(6), a party may move to dismiss a claim that does not state a right to relief. The Federal Rules of Civil Procedure require that a complaint provide the defendant with “fair notice of what the . . . claim is and the grounds upon which it rests.” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (quoting Bell Atlantic v. Twombly, 550 U.S. 544, 555 (2007)). In reviewing the sufficiency of a complaint, the Court must accept all well-pled facts as true and draw all permissible inferences in favor of the plaintiff. See Active Disposal Inc. v. City of Darien, 635 F.3d 883, 886 (7th Cir. 2011). A Rule 12(b)(6) motion to dismiss asks whether the complaint “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). The Court will not accept legal conclusions or conclusory allegations as sufficient to state a claim for relief. See McCauley v. City of Chi., 671 F.3d 611, 617 (7th Cir. 2011). Factual allegations must plausibly state an entitlement to relief “to a degree that rises above the speculative level.” Munson v. Gaetz, 673 F.3d 630, 633 (7th Cir. 2012). This plausibility determination is “a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.” Id.

         In ruling on a motion to dismiss under Rule 12(b)(6), a court may consider the complaint, as well as “documents attached to the complaint, documents that are critical to the complaint and referred to in it, and information that is subject to proper judicial notice.” Geinosky v. City of Chi., 675 F.3d 743, 745 n.1 (7th Cir. 2012); see also Papasan v. Allain, 478 U.S. 265, 268 n.1 (1986) (noting that in considering a motion to dismiss under Rule 12, a court is not precluded from taking notice of items in the public record).



         The following are the factual allegations in the complaint, which the Court must accept as true at this time.

         On June 20, 2017, ATF Agents searched Paraklese's facility and seized $21, 000 worth of solvent trap inventory. [Filing No. 1 at 7-8.] Present during the raid were Defendants Agent Robert Jones, Agent Bradley Leveritt, and an unspecified number of additional ATF agents[2] and ISP Officers. [Filing No. 1 at 8.] During the raid, the ATF Agents stated that they possessed a “sealed warrant” for the search, and routinely referred to a “Determination Letter.” [Filing No. 1 at 8-11.] The Determination Letter purportedly stated that “index marks” stamped on the solvent traps made them “silencers” (which would make possession of solvent traps unlawful). [Filing No. 1 at 8-11.] Despite Mr. Fosnight frequently requesting a copy of the Determination Letter, the ATF Agents never produced the letter. [Filing No. 1 at 8-11.] During the two-and-one-half-hour raid, Agents Jones and Leveritt repeatedly discouraged Mr. Fosnight from continuing the Paraklese business. [Filing No. 1 at 9.] Agents Jones and Leveritt also threatened that if Mr. Fosnight continued to manufacture and sell solvent traps, the ATF Agents would “be back.” [Filing No. 1 at 9.] In the two years following the search, Mr. Fosnight made several more requests for a copy of the Determination Letter, all of which were fruitless. [Filing No. 1 at 9-11.]

         On June 19, 2019, Mr. Fosnight and Paraklese filed this lawsuit, specifically naming ATF Agents Jones, Leveritt, Goldstein, and Anastasio as defendants, as well as unknown ATF Agents and ATF Supervisors. Mr. Fosnight and Paraklese set forth claims alleging violations of the Fourth and Fifth Amendments. [Filing No. 1 at 3.] On September 23, 2019, the named Defendants filed a Motion to Dismiss for Failure to State a Claim. [Filing No. 11.] Plaintiffs filed their Response on October 15, 2019, [Filing No. 13], and Defendants filed their Reply on October 22, 2019, [Filing No. 14].



         A. Parties' Arguments

         Defendants make several arguments in support of their Motion to Dismiss. [Filing No. 12.] First, they argue that the Complaint contains conclusory and general allegations that do not meet Rule 8's pleading standard. [Filing No. 12 at 4.] Specifically, Defendants argue that the Complaint contains allegations that “ATF Agents” and “Defendants” engaged in certain behavior and performed certain acts but does not allege which ATF Agents or Defendants are responsible for the alleged constitutional violations. [Filing No. 12 at 5.] According to Defendants, these allegations are insufficient because in a Bivens action (as Plaintiffs assert this is), “a defendant can be liable only for the actions or omissions in which he personally participated.” [Filing No. 12 at 6 (citing Colbert v. City of Chi., 851 F.3d 649, 657 (7th Cir. 2017); Sanville v. McCaughtry, 266 F.3d 724, 734 (7th Cir. 2001)).] Defendants also argue that even accepting as true the allegations that Agents Jones and Leveritt threatened Mr. Fosnight, verbal harassment and verbal threats are not constitutional violations. [Filing No. 12 at 6.]

         Second, Defendants argue that the Fifth Amendment due process claim should be dismissed pursuant to Ziglar v. Abbasi, 137 S.Ct. 1843 (2017). [Filing No. 12 at 8.] According to Defendants, Plaintiffs' claims seek an expansion of the Bivens remedy, something that is now “disfavored.” [Filing No. 12 at 8.] Moreover, in light of Abbasi, Defendants maintain that a Bivens remedy is inappropriate here. [Filing No. 8 at 1.]

         Third, Defendants argue that any Fifth Amendment due process claim fails as a matter of law, even if it survives the Abbasi analysis. [Filing No. 12 at 15.] According to Defendants, though it is unclear whether the Fifth Amendment claim is based on substantive due process or procedural due process, the characterization is inconsequential; the claim must fail either way. [Filing No. 12 at 15.] If the claim is a substantive due process claim, Defendants argue that substantive due process should not be used when a specific constitutional provision protects an infringed right (here, the Fourth Amendment). [Filing No. 12 at 15-16.] If it is a procedural due process claim, the Supreme Court and Seventh Circuit have held that an unauthorized intentional deprivation of property does not constitute a violation of the Due Process Clauses of the Fourteenth and Fifth Amendments. [Filing No. 12 at 16 (citing Hudson v. Palmer, 468 U.S. 517 (1984); Del Raine v. Williford, 32 F.3d 1024 (7th Cir. 1994)).]

         Last, Defendants argue that they are entitled to qualified immunity as government officials performing discretionary functions. [Filing No. 12 at 17.] According to Defendants, because the search and seizure were pursuant to a valid search warrant, they were presumptively reasonable. [Filing No. 12 at 18.] And because the Complaint does not contain allegations that could support a finding that the warrant was invalid or that Defendants exceeded the scope of the warrant, the Court is not presented with facts that could rebut the presumption of validity. Thus, according to Defendants, the Complaint lacks allegations that could support a finding that Defendants violated Mr. Fosnight's constitutional rights. [Filing No. 12 at 19.]

         Plaintiffs respond that Agents Jones and Leveritt were present during the search, but that Plaintiffs do not know the identities of the other ATF Agents that were also present. [Filing No. 13 at 7.] According to Plaintiffs, “[w]hen federal agents engage in knowing violations of the rights of individuals under the law, it should be understood, and a matter of common sense, that these same federal agents will not volunteer their identities.” [Filing No. 13 at 7.] Plaintiffs further argue that during the search, Agents Jones and Leveritt threatened Mr. Fosnight to stop selling solvent traps. [Filing No. 13 at 10.] Additionally, Plaintiffs argue that “ATF Agents” repeatedly told Mr. Fosnight that the purported Determination Letter existed but refused to provide it to him, because, according to Mr. Fosnight, no such letter existed. [Filing No. 13 at 9.] Plaintiffs contend that ATF agents also “consistently and persistently” interrogated Mr. Fosnight without Mirandizing him, and generally “acted deceptively and unlawfully” in conducting the search and seizure. [Filing No. 13 at 7-12.]

         Plaintiffs also respond that this action is authorized by Bivens. [Filing No. 13 at 2.] Plaintiffs argue that Bivens “created a private damages action against federal officials for constitutional torts (civil rights violations), which are not covered by the [Federal Tort Claims Act].” [Filing No. 13 at 2.] In Federal Tort Claims Act cases, the government is substituted for the defendant, and punitive damages are not available. [Filing No. 13 at 2.] Plaintiffs argue that they have sufficiently pleaded that their rights have been violated by federal actors acting in their individual capacities under color of federal law, and therefore the case should be heard. [Filing No. 13 at 2-3.]

         Third, Plaintiffs argue that this Court should not, and cannot, properly consider the search warrant obtained by the ATF Agents. [Filing No. 13 at 7-8.] They argue that any arguments based on the search warrant “reference[] matters outside the face of the pleadings and [are] not properly subject to consideration.” [Filing No. 13 at 8.] According to Plaintiffs, “[a] Defendant is entitled to dismissal of a claim only if it appears beyond doubt that the Plaintiff would not be entitled to relief under any set of facts that might be proved within the scope of the complaint's allegations.” [Filing No. 13 at 8.] According to Plaintiffs, Defendants' reference to the search warrant is a “reference to an ancillary case and controversy, ” and the Court should not dismiss the Complaint on the basis of an ancillary matter. [Filing No. 13 at 8.]

         Finally, Plaintiffs agree that qualified immunity applies to federal officials and agents who perform discretionary functions. [Filing No. 13 at 13.] But, they argue, qualified immunity is inappropriate here because qualified immunity “may be overcome by a showing that [the federal officials] violated a constitutional right.” [Filing No. 13 at 13.] Plaintiffs argue that “[t]he Complaint as pleaded properly alleges that the Defendants violated well-established rights secured to ...

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