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UNITED STATES v. HALL

January 5, 1990

UNITED STATES OF AMERICA, Plaintiff
v.
JOHN P. HALL, Defendant



The opinion of the court was delivered by: NEALON

 WILLIAM J. NEALON, UNITED STATES DISTRICT JUDGE.

 Currently before the court are the cross-motions of the parties for summary judgment. See documents 9 and 10 of record. For the reasons that follow, the court will deny the summary judgment motion of the plaintiff and will grant summary judgment in favor of the defendant.

 I. Background

 A. Factual History

 On or about November 9, 1984, the defendant John P. Hall (Hall) was indicted by a federal grand jury sitting in Harrisburg, Pennsylvania, and charged with, inter alia, knowingly and willfully transporting bearer negotiable instruments in the amount of $ 1,035,000 from Camp Hill, Pennsylvania to Nassau, Bahamas in violation of 31 U.S.C. §§ 5316(b) and 5322(b) (requiring the filing of a Currency and Monetary Instrument Report). See document 18 of record, exhibit C. The period involved in the five (5) count indictment was from October 17 to October 31, 1984. During the month of November, 1984, the United States (the Government) and Hall's counsel engaged in plea negotiations. See documents 27 and 33 of record at para. 6.

 On December 3, 1984 Hall entered a plea of guilty before this court to Counts I, II, and V of the indictment which charged him with violations of 18 U.S.C. § 2314 (Count I), 18 U.S.C. § 1343 (Count II), and 31 U.S.C. § 5316(b) (Count V). See document 27 at para. 29. The plea was entered pursuant to a plea agreement signed by Hall, his counsel, and David Dart Queen (Queen), who was, at that time, the United States Attorney for the Middle District of Pennsylvania. See id.; See also document 18 of of record, exhibit I.

 Hall was sentenced by this court on March 13, 1985 to a one (1) year term of imprisonment, two (2) years special probation and a $ 10,000 fine. See document 18, exhibit J. In addition, the court directed Hall to perform two hundred (200) hours of community service work and to successfully complete a mental health program as directed by the United States Probation Office. See id. By Order dated July 24, 1985, the court, pursuant to Hall's motion for reduction of sentence under Rule 35 of the Federal Rules of Criminal Procedure, reduced Hall's period of incarceration by approximately two weeks and increased his community service requirement to four hundred (400) hours. See id., exhibit K.

 On July 15, 1986, Hall was informed by letter from Queen, who was, by that time, a Deputy Assistant Secretary in the Department of the Treasury and no longer United States Attorney in this district, that Queen, in his new capacity, had assessed a civil penalty against Hall in the amount of $ 1,035,000 pursuant to 31 U.S.C. § 5321(a)(2). See id., exhibit L. By letter dated August 12, 1986, Hall's counsel registered Hall's objections to this assessment. See id., exhibit N. In his response of October 14, 1986, Queen stated that after consideration of each of Hall's arguments we . . . have concluded that the original civil penalty, while substantial, is appropriate." Id. exhibit O.

 B. Procedural History

 On July 29, 1988, the Government instituted this action seeking to collect the civil penalty which had been assessed against Hall. See document 1 of record. Hall filed an answer to the Government's complaint on November 4, 1988. See document 6 of record.

 The Government's motion for summary judgment, a statement of undisputed material facts, as well as supporting memorandum and other documentation were filed on April 18, 1989. See documents 9, 10, and 11 of record. Hall responded to the Government's motion on July 3, 1989 by filing a memorandum of law in opposition to the motion and a response to the Government's statement of undisputed facts. See documents 14 and 15 of record. Additionally, Hall filed his own motion for summary judgment, along with a supporting memorandum and documentation. See documents 16-19 of record.

 The Government noted its opposition to Hall's motion for summary judgment by a brief filed on August 29, 1989. See document 24 of record. Hall subsequently filed a reply brief and his statement of undisputed facts. See documents 26 and 27 of record. The Government filed a response to Hall's statement of undisputed facts on October 18, 1989. See document 33 of record.

 With the receipt of the Government's response to Hall's statement of undisputed facts, all the documents necessary for the court's consideration of these motions have been filed. Thus, the motions are now ripe for disposition by the court.

 II. Discussion

 Summary judgment is appropriate if "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). When examining a motion for summary judgment, the court must view all facts in the light most favorable to the party opposing the motion. Betz Laboratories, Inc. v. Hines, 647 F.2d 402, 404 (3d Cir. 1981). If there exists a genuine issue as to any material fact, summary judgment must be denied. Fed.R.Civ.P. 56(c). A fact is material if it might affect the outcome of the suit under the governing law. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id. (citing 10A C. Wright, A. Miller & M. Kane, Federal Practice & Procedure § 2725, at pp. 93-95 (1983)). In addition, summary judgment will not lie if the dispute about a material fact is "genuine," that is, "if the evidence is such that a reasonable jury could return a verdict in favor of the nonmoving party." Id.

 In cases such as the present one, where cross-motions for summary judgment have been filed, each side essentially contends that no issue of material fact exists from its particular point of view. The court should, therefore, consider each motion for summary judgment separately. Home for Crippled Children v. Prudential Insurance Co., 590 F. Supp. 1490, 1495 (W.D.Pa. 1984). Since each side is moving for summary judgment, each side bears the burden of establishing a lack of genuine issues of material fact. See id. Such inherently contradictory claims do "not constitute an agreement that if one is rejected the other is necessarily justified or that the losing party waives . . . determination [of] whether genuine issues of material fact exist." Rains v. Cascade Industries, Inc., 402 F.2d 241, 245 (3d Cir. 1968); See also 10A C. Wright and A. Miller, and M. Kane, Federal Practice and Procedure § 2720 at p. 16-19 (1983). Moreover, the standards under which a court grants or denies summary judgment do not change by virtue of cross-motions being presented. Home for Crippled Children, 590 F. Supp. at 1495.

 With these principles in mind, the court will embark on its discussion of the present motions. Because the motions essentially argue opposite sides of the same issues, however, separate examination of each motion would only lead to confusion and repetition. Thus, the court will set out the contentions made in each motion and the opposition thereto and will then discuss the pertinent arguments.

 The language of 31 U.S.C. § 5321(a)(2) provides, as follows:

 
The Secretary of the Treasury may impose an additional civil penalty on a person not filing a Report, or filing a Report containing a material omission or misstatement, under Section 5316 of this Title or a regulation prescribed under Section 5316. A civil penalty under this paragraph may not be more than the amount of the monetary instrument for which the Report was required. A civil penalty under this paragraph is reduced by an amount forfeited under Section 5317(b) of this Title.

 31 U.S.C. § 5321(a)(2). In its summary judgment motion, the Government claims that the undisputed facts of this case entitle it to recovery under this provision and, therefore, to judgment against Hall. See document 10 of record.

 The Government points to two undisputed facts as support for this claim. First, that Hall did transport $ 1,035,000 in bearer United States Treasury Notes with coupons attached and bearer Municipal Bonds with coupons attached from Cumberland County, Pennsylvania to Nassau, Bahamas without filing a currency and Monetary Instrument Report (CMIR) as required by 31 U.S.C. § 5316(b), see document 11 of record at 2, and secondly, that Hall pled guilty to this offense on December 3, 1984. See id. These facts, the Government contends, when coupled with the power to assess a civil penalty upon such offenders given to it by 31 U.S.C. § 5321(a)(2), warrant the granting of summary judgment in its favor. See generally id.

 In response to the Government's motion and in support of his own motion, Hall essentially makes five arguments. First, Hall argues that this penalty assessment constitutes a violation of representations made by the Government to induce Hall to sign the plea agreement and enter his guilty plea. See document 17 of record at 26. Hall's second contention is that the Government's actions in this case violate various constitutional provisions, including the double jeopardy clause *fn1" and the separation of powers doctrine. See id. at 51. Next, Hall contends that the conduct of Queen and Customs Agent Richard T. McCloskey (McCloskey) in this action violated Section 554(d) of the Administrative Procedures Act, 5 U.S.C. § 554(d) and denied him due process of law. See id. at 61. Additionally, Hall maintains that the documents at issue in the underlying criminal case were not truly "negotiable" and, therefore, no civil penalty is warranted. See id. at 72. Finally, Hall claims that the doctrines of laches and estoppel bar this action by the Government. See id. at 77.

 The Government denies that it made any misrepresentations to Hall to induce him to plead guilty, or that this action, or the roles of Queen and McCloskey, violate any provisions of the constitution or federal law. See generally document 24 of record. Furthermore, the Government contends that Hall is estopped by virtue of his guilty plea from arguing that these instruments are not truly "negotiable" and that the assessment at issue here is in no way barred by the doctrines of laches or estoppel. See id. Hall's reply contends that the Government's responses to his five arguments are without merit. See document 26 of record. Because the court finds that Hall is entitled to summary judgment because the imposition of a civil assessment in this ...


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