Opinion
CV-22-00252-PHX-MTM
11-22-2022
John Scherer, Plaintiff, v. Alex Sualim, Defendant.
TO THE HONORABLE STEPHEN M. McNAMEE, SENIOR UNITED STATES DISTRICT JUDGE:
REPORT AND RECOMMENDATION
Honorable Michael T. Monrissev, United States Magistrate Judge.
This Report and Recommendation is filed under General Order 21-25.
General Order 21-25 states in relevant part:
When a United States Magistrate Judge to whom a civil action has been assigned pursuant to Local Rule 3.7(a)(1) considers dismissal to be appropriate but lacks the jurisdiction to do so under 28 U.S.C. § 636(c)(1) due to incomplete status of election by the parties to consent or not consent to the full authority of the Magistrate Judge,
IT IS ORDERED that the Magistrate Judge will prepare a Report and Recommendation for the Chief United States District Judge or designee.
IT IS FURTHER ORDERED designating the following District Court Judges to review and, if deemed suitable, to sign the order of dismissal on my behalf:
Phoenix/Prescott: Senior United States District Judge Stephen M. McNamee.....
I. Factual and Procedural History
Plaintiff commenced this civil action on February 16, 2022, with a pro se Complaint for “recovery of money” against Defendant Alex Sualim. Doc. 1. Therein, Plaintiff states he initiated the action “in reference to . . . [Arizona District Court case no. 2:13-cr-1515, United States v. Alex Sualim] . . . where Alex Sualim . . . [was] convicted of violating Title 18, U.S.C. § 1349, Conspiracy to Commit Wire/Mail Fraud.” Doc. 1 at 2. Plaintiff alleges that he “individually lost $315,000.00 to the Defendant by [f]raud.” Doc. 1 at 2.
On February 20, 2015, Defendant Alex Sualim pled guilty to violating 18 U.S.C. § 1349, Conspiracy to Commit Wire/Mail Fraud. 2:13-cr-1515, Doc. 154 at 1.
On September 16, 2015, this Court sentenced Defendant to 150 months' imprisonment. 2:13-cr-1515, Doc. 154 at 1. The Court also ordered Defendant to pay restitution to the following victims, in the following amounts: “Benham Carmili/O2 Electronics, Inc. $5,500,000.00; Thomas Hale $2,000,000.00; Donald Fackler $480,000.00; Mike Foster $315,000.00; John Smith $985,000.00; Andrew Walters $185,000.00; Erik Bloom $1,485,000.00; Yinlong Jiang $652,500.00; Scott Wolfe $75,000.00; Terry Holdt $390,000.00; Karl Doan $195,000.00; [and] Leon Massa $838,333.00.” 2:13-cr-1515, Doc. 154 at 2 (emphasis added).
Plaintiff is not named in the Court's Restitution Order. 2:13-cr-1515, Doc. 154 at 2. Plaintiff, however, alleges he is a member of the “Thomas Hale Group which is an organization of victims of the fraudulent activity of Defendant.” Doc. 1 at 3. Plaintiff further alleges that Thomas Hale has “duly subrogated its rights to claim the restitution amount ... of $315,000, through a formal letter addressed the Federal Bureau of Investigation.” Doc. 1 at 3. Plaintiff requests the Court “allow the [c]ivil [s]uit for [r]ecovery of [m]oneys” and “[o]rder the Defendant to [p]ay [Plaintiff] $315,000 which was illegally extracted from Plaintiff through fraud by the Defendant.” Doc. 1 at 3.
On May 19, 2022, Plaintiff served Defendant with the instant action. Doc. 11. After Defendant failed to appear, Plaintiff moved for entry of default, which the Clerk of the Court granted on August 9, 2022. Docs. 14, 15. Plaintiff's motion for default judgment (doc. 12) is pending.
On September 13, 2022, the Court ordered Plaintiff to file an amended complaint properly alleging subject matter jurisdiction. Doc. 16. Plaintiff filed an Amended Complaint on October 27, 2022.Doc. 20.
Plaintiff is a citizen of Arizona. Doc. 20 at 1. Defendant is currently imprisoned in a federal correctional institution in Mendota, California. Doc. 11. The amount in controversy exceeds $75,000.00. Doc. 20 at 3-4.
Because Plaintiff cannot possibly win relief, see Wong v. Bell, 642 F.2d 359, 36162 (9th Cir. 1981), the Court will recommend the Amended Complaint be dismissed without leave to amend, and the pending motion (doc. 12) be denied as moot.
II. Legal Standard
The Court has reviewed Plaintiff's Amended Complaint. Doc. 20. Even though Plaintiff paid the filing fee, the Court retains the inherent authority to sua sponte dismiss a claim under Federal Rule of Civil Procedure 12(b)(6). See Wong, 642 F.2d at 361-62 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1357 at 593 (1969)). As the Ninth Circuit has instructed, courts must “construe pro se filings liberally.” Hebbe v. Pliler, 627 F.3d 338, 342 (9th Cir. 2010). A “complaint [filed by a pro se litigant] ‘must be held to less stringent standards than formal pleadings drafted by lawyers.'” Id. (quoting Erickson v. Pardus, 551 U.S. 89, 94 (2007)). Accordingly, if the Court determines that a pleading could be cured by the allegation of other facts, a pro se litigant is entitled to an opportunity to amend a complaint before dismissal of the action. See Lopez v. Smith, 203 F.3d 1122, 1127-29 (9th Cir. 2000) (en banc). However, where a claimant cannot possibly win relief, dismissal under Rule 12(b)(6) may be made without notice. See Wong, 642 F.2d at 362.
III. Analysis
The Mandatory Victims Restitution Act (“MVRA”) mandates that orders of restitution be entered against defendants found guilty of certain charges. See 18 U.S.C. § 3663A. Enforcement of the MVRA is governed by 18 U.S.C. § 3664, which provides, in relevant part:
(m)(1)(A)(i) An order of restitution may be enforced by the United States in the manner provided for in subchapter C of chapter 227 and subchapter B of chapter 229 of this title; or (ii) by all other available and reasonable means.
(B) At the request of a victim named in a restitution order, the clerk of the court shall issue an abstract of judgment certifying that a judgment has been entered in favor of such victim in the amount specified in the restitution order. Upon registering, recording, docketing, or indexing such abstract in accordance with the rules and requirements relating to judgments of the court of the State where the district court is located, the abstract of judgment shall be a lien on the property of the defendant located in such State in the same manner and to the same extent and under the same conditions as a judgment of a court of general jurisdiction in that State.18 U.S.C. § 3664.
“Subsection A of the statute expressly authorizes the United States to enforce a restitution order by the statutory remedy in the Act “or by all other available and reasonable means.'” Schultz v. United States, 594 F.3d 1120, 1123 (9th Cir. 2010) (citing 18 U.S.C. § 3664(m)(1)(A)). By contrast, subsection B prescribes only one method by which victims may enforce a restitution order. Id. “The negative implication is that Congress meant to prohibit enforcement in any other way.” Id.; see also Madigan v. Bronstein, No. 18MC61, 2018 WL 1768283, at *2 (S.D.N.Y. Apr. 12, 2018) (noting that the enforcement mechanism available to victims is meager compared to the “panoply of enforcement options at the federal government's disposal”).
Under subsection (B), “[a]t the request of a victim named in a restitution order,” the “clerk of the court [must] issue an abstract of judgment certifying that a judgment has been entered in favor of such a victim.” 18 U.S.C. § 3664(m)(1)(B); see also United States v. Perry, 360 F.3d 519, 524 (6th Cir. 2004) (noting subsection (B) of the statute allows “victims named in restitution orders to obtain and register a judgment lien on the defendant's property that then operates as a lien on the property under state law”); United States v. Miller, 588 F.Supp.2d 789, 802 (W.D. Mich. 2008) (recognizing “the victim may convert the restitution order into an abstract of judgment for the full amount of the restitution order,” and by doing so obtain a lien on the property of the defendant).
As noted, supra Section II, “[dismissal of a pro se complaint without leave to amend is proper only if it is absolutely clear that the deficiencies of the complaint could not be cured by amendment.” Schucker v. Rockwood, 846 F.2d 1202, 1203-04 (9th Cir. 1988) (internal quotation marks and citation omitted).
Here, subsection B of 18 U.S.C. § 3664 allows a victim named in the Court's Restitution Order (doc. 154) to request and file an abstract of judgment to proceed against Defendant. Plaintiff's Amended Complaint is an attempt to enforce the Restitution Order (doc. 154) in a manner outside the scope of § 3664(m)(1)(B). “Because the remedy provided under the MVRA is exclusive,” Plaintiff may not initiate this civil action to enforce the Restitution Order. See Schultz, 594 F.3d at 1123. This case fits within Wong's ambit as it raises a claim for which Plaintiff cannot possibly win relief. See Wong, 642 F.2d at 362. Accordingly, dismissal under Rule 12(b)(6) may be made without notice, and the Court will exercise its authority to sua sponte dismiss the Complaint without leave to amend. See id.
IT IS RECOMMENDED Plaintiff's Amended Complaint (doc. 20) be DISMISSED WITHOUT LEAVE TO AMEND.
IT IS FURTHER RECOMMENDED Plaintiff's other pending motion (doc. 12) is DENIED as moot.
This Report and Recommendation is not an order that is immediately appealable to the Ninth Circuit Court of Appeals. Any notice of appeal under Federal Rule of Appellate Procedure 4(a)(1) should not be filed until entry of the District Court's judgment. The parties have fourteen days from the date of service of this Report and Recommendation's copy to file specific, written objections with the Court. See 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 6(a), 6(b) and 72. Thereafter, the parties have fourteen days to respond to the objections. Failure to timely object to the Magistrate Judge's Report and Recommendation may result in the District Court's acceptance of the Report and Recommendation without further review. See United States v. Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003). Failure to timely object to any factual determinations of the Magistrate Judge may be considered a waiver of a party's right to appellate review of the findings of fact in an order of judgment entered pursuant to the Magistrate Judge's Report and Recommendation. See Fed.R.Civ.P. 72.