1 STEFAN D. CASSELLA 2 Asset Forfeiture Law, LLC 10609 Rachel Yates Court 3 Laurel, MD 20723 4 Telephone: 240-338-0724 [email protected] 5 Amicus Curiae 6 UNITED STATES DISTRICT COURT 7 FOR THE CENTRAL DISTRICT OF CALIFORNIA 8 ) 9 UNITED STATES OF AMERICA, ) No. CR 13-106(A)-DOC ) 10 Plaintiff, ) ) BRIEF OF STEFAN D. CASSELLA vs. 11 ) AS AMICUS CURIAE ) 12 ) MONGOL NATION, ) 13 An unincorporated association, ) ) 14 Defendant. ) 15 16 Stefan D. Cassella, appearing at the invitation of the court as amicus curiae, 17 respectfully submits the following Memorandum of Points and Authorities 18 regarding two of the issues that the court has invited amici to address. 19 PROCEDURAL BACKGROUND 20 This case involves the criminal forfeiture of the intangible rights and 21 privileges associated with certain federally-registered collective membership marks 22 (“the Marks”) bearing words and images associated with Defendant Mongol 23 Nation, an unincorporated association of persons interested in riding motorcycles. 24 In 2010, the court ordered the forfeiture of the Marks as part of the sentence 25 imposed on Ruben Cavazos who had been convicted under the RICO statute, 18 26 U.S.C. § 1962, of conducting the affairs of the association through a pattern of 27 racketeering activity, including drug trafficking, murder and attempted murder. 28 United States v. Cavazos, CR08-1201-DOC, Preliminary Order of Forfeiture (Dkt. 1 1 3854). Defendant Mongol Nation, however, intervened in the criminal proceeding 2 pursuant to 18 U.S.C. § 1963(l), asserting that the Marks belonged to it and not to 3 the individual defendant. 4 After conducting an evidentiary hearing, the court found that the Marks did 5 not belong to the individual defendant. To the contrary, the court held that “the 6 club maintains excusive ownership of the Marks” and that because Mongol Nation 7 was not named as a defendant in the criminal case and was not convicted of any 8 offense, its ownership interest in the marks was not forfeitable in those 9 proceedings. Cavazos (Dkt. 4481), quoted in United States v. Mongol Nation, 132 10 F. Supp.3d 1207, 1215-16 (C.D. Cal. 2015). Accordingly, the court vacated the 11 forfeiture order without addressing the First Amendment or trademark issues “that 12 might have been raised if the club itself had been indicted in the Cavazos case.” 13 132 F. Supp.3d at 1216. 14 Thereafter, Defendant Mongol Nation was itself indicted on the RICO 15 charges and was convicted by a jury. In particular, the jury found Defendant guilty 16 of a conspiracy under Section 1962(d) to engage in a pattern of racketeering acts 17 that included multiple murders, other acts of physical violence, and the distribution 18 of quantities of cocaine and methamphetamine. Moreover, on January 11, 2019, 19 the jury returned a special verdict finding inter alia that the Marks were subject to 20 forfeiture in connection with the RICO conspiracy pursuant to 18 U.S.C. §§ 21 1963(a)(1), (2) and (3). 22 Based on the conviction and the jury’s special verdict, the Government has 23 moved pursuant to Rule 32.2(b) for a preliminary order of forfeiture regarding the 24 Marks. (Dkt. 354) Defendant Mongol Nation has opposed the entry of that order, 25 raising First Amendment objections on behalf of itself and its members. (Dkt. 26 362). On January 17, 2019, the court issued an order inviting amicus curiae to 27 submit briefs discussing on any or all of four issues. (Dkt. 358) The undersigned 28 amicus respectfully submits the following with regard to two of those issues: 2 1 1. Whether criminal forfeiture of any and all legal and equitable rights of 2 any kind or nature associated with or appurtenant to a collective membership mark 3 violates the First Amendment to the United States Constitution; and 4 2. Whether criminal forfeiture of a collective membership mark is 5 feasible under intellectual property law. 6 CRIMINAL FORFEITURE PROCEDURE 7 Once a defendant has been convicted of a RICO offense and the court or 8 jury has found that its property is subject to forfeiture in accordance with the RICO 9 statute, the entry of a forfeiture order is mandatory. Alexander v. United States, 10 509 U.S. 544, 562 (1993) (“a RICO conviction subjects the violator not only to 11 traditional, though stringent, criminal fines and prison terms, but also mandatory 12 forfeiture under [section] 1963”); United States v. Newman, 659 F.3d 1235, 1240 13 (9th Cir. 2011) (“When the Government has met the requirements for criminal 14 forfeiture, the district court must impose criminal forfeiture, subject only to 15 statutory and constitutional limits”). See United States v. Blackman, 746 F.3d 137, 16 143 (4th Cir. 2014) (28 U.S.C. § 2461(c) makes criminal forfeiture mandatory in all 17 cases; “The word ‘shall’ does not convey discretion . The plain text of the statute 18 thus indicates that forfeiture is not a discretionary element of sentencing. 19 Insofar as the district court believed that it could withhold forfeiture on the basis of 20 equitable considerations, its reasoning was in error.”). 21 Accordingly, unless there is a constitutional objection to the entry of the 22 order, the court must enter a preliminary order of forfeiture forfeiting to the United 23 States all rights and interests in the property that the jury has found to be subject to 24 forfeiture under Section 1963(a), and must make the order part of the defendant’s 25 sentence. See Rule 32.2(b)(2)(A) and (b)(4); United States v. Nava, 404 F.3d 26 1119, 1124 (9th Cir. 2005) (“At sentencing, the district court must order forfeiture 27 of the property in addition to imposing any other sentence”). 28 Defendant Mongol Nation has objected that there is a constitutional 3 1 objection to the entry of the forfeiture order that the Government has requested: 2 that the forfeiture would violate the First Amendment rights of Defendant and its 3 members. For the following reasons, the undersigned amicus submits that that 4 there is no such bar to the entry of the forfeiture order. 5 WHOSE FIRST AMENDMENT RIGHTS ARE AT ISSUE? 6 As a threshold matter, the court must determine if it is concerned only with 7 the impact of the proposed forfeiture on the First Amendment rights of Defendant 8 Mongol Nation, an unincorporated association, or also with its impact on the First 9 Amendment rights of the individual members of that association. 10 Defendant asserts that it is objecting to entry of the preliminary order of 11 forfeiture on behalf of itself and its members. Defendant's Opp. at 2. It is well- 12 established, however, that a defendant cannot object to the entry of a forfeiture 13 order on the ground that the property to be forfeited belongs to a third party, or that 14 the forfeiture would violate the rights of a third party. See United States v. 15 Ayika, 837 F.3d 460, 475 n.24 (5th Cir. 2016) (defendant cannot object to the 16 forfeiture of property traceable to his offense on the ground that third parties have 17 an interest in the property, citing Rule 32.2(b)(2)(A) and collecting cases); United 18 States v. Rivers, 60 F.Supp.3d 1262, 1265 (M.D. Fla. 2014) (“any objection [the 19 defendant] may have on the basis that a third party holds an interest in forfeitable 20 property is not his objection to make”); Rule 32.2(b)(2)(A) (providing that a court 21 must enter a preliminary order of forfeiture without regard to the interests of third 22 parties, and that issues regarding a third party's interest in the property must be 23 deferred to the ancillary proceeding). 24 If a third party objects to the entry of the forfeiture order, he or she must do 25 so independently by filing a claim at the appropriate time in the ancillary 26 proceeding. See United States v. Brown, 2006 WL 898043, *5 (E.D.N.Y. 2006) 27 (defendant cannot object to the forfeiture of real property involved in a money 28 laundering offense on the ground that the property belongs to his wife; the proper 4 1 procedure is for the court to enter a preliminary order of forfeiture as to the 2 property and allow the wife to file a claim in the ancillary proceeding). 3 Thus, while Defendant may object to the entry of the forfeiture order on its 4 own behalf, if may not invoke the rights of its members to do so. 5 Defendant nevertheless argues that it has "associational standing" to assert 6 the rights of members of its association who "would otherwise have standing to sue 7 on their own behalf." Defendant's Opp. at 1. Specifically, it contends that because 8 "individual members of Mongol Nation would have standing to assert their 9 Constitutional rights," Mongol Nation has standing to assert those rights on its 10 members' behalf by opposing the forfeiture order. 11 Whatever merit the concept of associational standing would have in another 12 case, it has no application here, for it presumes that the members have a legal 13 interest in the Marks that the government is seeking to forfeit. Unfortunately for 14 Defendant, the law of the case is to the contrary. 15 On two occasions, the court has already found that Mongol Nation and its 16 members are separate juridical entities, and that because the Marks belong only to 17 Mongol Nation, they could not be forfeited in the criminal case in which the 18 individual members were convicted.