OPINION
PAUL
L. FRIEDMAN United States District Judge
This
matter is before the Court on the motion [Dkt. No. 997] of
claimants Alexander, Ekaterina, and Lecia Lazarenko
(collectively, “claimants”) to reconsider the
portion of the Court's opinion of August 3, 2017, denying
them leave to plead an Eighth Amendment excessive fines
affirmative defense. See United States v. All Assets Held
at Bank Julius Baer & Co., Ltd., 268 F.Supp.3d 135
(D.D.C. 2017). Upon careful consideration of the parties'
written submissions, the relevant legal authorities, and the
entire record in this case, the Court will deny
claimants' motion.[1]
I.
FACTUAL AND PROCEDURAL BACKGROUND
The
Court's prior opinions summarize the factual and
procedural history of this case, starting with the criminal
prosecution of claimants' father, Pavel Lazarenko, and
continuing through this long-running in rem civil
forfeiture proceeding. See, e.g.,
United States v. All Assets Held at Bank Julius Baer
& Co., Ltd., 307 F.R.D. 249, 250-51 (D.D.C. 2014);
United States v. All Assets Held at Bank Julius Baer
& Co., Ltd., 959 F.Supp.2d 81, 84-94 (D.D.C. 2013);
United States v. All Assets Held at Bank Julius Baer
& Co., Ltd., 772 F.Supp.2d 205, 207-08 (D.D.C.
2011); United States v. All Assets Held at Bank Julius
Baer & Co., Ltd., 571 F.Supp.2d 1, 3-6 (D.D.C.
2008). In brief, Pavel Lazarenko was a prominent Ukrainian
politician who, with the aid of various associates, was
“able to acquire hundreds of millions of United States
dollars through a variety of acts of fraud, extortion,
bribery, misappropriation and/or embezzlement”
committed during the 1990s. United States v. All Assets
Held at Bank Julius Baer & Co., Ltd., 959 F.Supp.2d
at 85 (quoting Am. Compl. ¶¶ 1, 10).
A.
The Samante Assets
As
relevant to the present motion for reconsideration, the
United States filed its original complaint in 2004 seeking
forfeiture of, inter alia, “[a]ll funds on
deposit at Credit Suisse (Guernsey) Limited, in account
number 41610 in the name of Samante Limited as Trustees of
the Balford Trust.” Compl. ¶ 5(b). The Court will
refer to the funds that the United States identified in
paragraph 5(b) of the original complaint - as well as the
additional funds associated with another account number
identified in the amended complaint - as the “Samante
assets.”
Claimants
filed a claim in June 2004 asserting their beneficial or
ownership interest solely in the Samante assets. See
First Claim. In August 2004, claimants filed an answer to the
original complaint asserting five affirmative defenses,
including an “Innocent Interest-Due Process”
affirmative defense under the Fifth Amendment:
As a fifth affirmative defense to the Complaint, [claimants],
and each of them, assert that their interests in the
defendant trust res are innocent, in that claimants
have at no time had any knowledge of any of the acts or
omissions alleged in the Complaint for Forfeiture.
Accordingly, their interests in defendant property and
currency are not subject to forfeiture under the provisions
of Title 18, United States Code, § 981, and forfeiture
is prohibited by the Due Process Clause of the Fifth
Amendment to the United States Constitution.
2004 Answer ¶ 131. Claimants did not plead or otherwise
mention an Eighth Amendment excessive fines affirmative
defense in their 2004 answer.
After
the United States filed an amended complaint in 2005,
claimants filed a second claim asserting an interest solely
in the Samante assets, see Second Claim, as well as
a motion to dismiss the amended complaint, see Mot.
to Dismiss Am. Compl. The Court denied the motion to dismiss
in an order dated March 29, 2007, see Order Den.
Mot. to Dismiss, and an opinion dated July 9, 2008, see
United States v. All Assets Held at Bank Julius Baer &
Co., Ltd., 571 F.Supp.2d at 17. Following the denial of
their motion to dismiss and a subsequent motion for
reconsideration on September 5, 2008, see Mem. Op.
& Order Den. Mot. for Recons., claimants did not file an
answer to the amended complaint.
In
October 2011, the United States wrote to claimants'
attorney and stated that “if your clients do not file
an appropriate Answer to the First Amended Complaint by
November 14, 2011, the United States will move to strike
their Claims.” Mot. to Strike Ex. B at 2.
Claimants' attorney thanked the United States for its
“courtesy in permitting” the late filing, Mot. to
Strike Ex. C at 1, but did not file an answer to the amended
complaint.
B.
The United States' Motion to Strike Claimants'
Claim
In
April 2015, the United States moved to strike claimants'
claim to the Samante assets for, inter alia, failure
to file an answer to the amended complaint. See Mot.
to Strike Mem. at 3-4.[2] In response to the United States'
motion to strike, claimants admitted that they had failed to
file an answer to the amended complaint “as a result of
an oversight by their counsel.” See Opp'n
to Mot. to Strike at 4. They attached a declaration from
their attorney in which the attorney averred that he
remembered the October 2011 letter from the United States
inviting him to file claimants' untimely answer, but
“failed to follow up or to insure that the Answer was
filed.” Weinberg Decl. at 4.
On
January 6, 2017, the Court denied the United States'
motion to strike. United States v. All Assets Held at
Bank Julius Baer & Co., Ltd., 228 F.Supp.3d 118
(D.D.C. 2017). The Court excused claimants' failure to
file an answer to the amended complaint because “that
failure has not at all prejudiced the United States, ”
given that the allegations in the amended complaint did not
substantially vary from the original complaint with respect
to the Samante assets. Id. at 126. Finding no
prejudice to the United States by claimants' failure to
file a timely answer to the amended complaint, the Court
denied the United States' motion to strike and permitted
claimants to seek leave to file an answer. See id.
The Court cautioned claimants, however, as follows:
“The United States is free to again raise the issue of
prejudice in its opposition to claimants' motion for
leave to file if, for example, claimants' answer . . .
varies the responses claimants made in their answer to the
original complaint for paragraphs that are identical in the
amended complaint . . . .” Id. at 126 n.2.
C.
Claimants' Motion for Leave to File ...