Opposition Brief — On Leong Chinese Merchants Ass'n Building v. United States

= SST oRE OLE

Iu the Supreme Court of the United States

OCTOBER TERM, 1990

ON LEONG CHINESE MERCHANTS

ASSOCIATION BUILDING, ET AL., PETITIONERS

Vv.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

J. DOUGLAS WILSON

Attorney

Department of Justice

Washington, D.C. 20530

(202) 514-2217

QUESTIONS PRESENTED

1. Whether 18 U.S.C. 1955(d), which provides

for the forfeiture of “any property, including money”

used in violation of Section 1955, authorizes the for-

feiture of real property.

2. Whether the district court abused its discre-

tion in denying petitioner’s motion for a continu-

ance of summary judgment proceedings under Fed-

eral Rule of Civil Procedure 56(f).

(1)

cn SR

TABLE OF CONTENTS

Page

eo, cased Sacrpnavtsavesean nodaadieh 1

SS i ee SE a es a ec 1

i cutyecteatwassiawnaaniand cine 2

TI ty AE a LE 7

I a. sisispaseiisenesabebes 12

oa a shies scenes la

RT ane PER LC RIS I RAINES 5a

TABLE OF AUTHORITIES

Cases:

Demarest v. Manspeaker, 111 S. Ct. 599 (1991)... 7

DF Activities Corp. Vv. Brown, 851 F.2d 920 (7th

a aE IIRC gt aS Bl tal Oe 4

Fidelity & Deposit Co. v. Arenz, 290 U.S. 66

Neen el scuanth watdanonsons 7

Garrett v. City & County of San Francisco, 818

pe EN ky 6 ean eee 9

Griffin v. Oceanic Contractors, Inc., 458 U.S. 564

er DD ois An a Sean 7-8

Kor v. Ball State University, 726 F.2d 1222 (7th

REE an A SARS, SER ETI ES ET re eR 9

United States v. James, 478 U.S. 597 (1986) .......... 7

United States v. One Clipper Bow KF ich Nisku,

gs EB Eb OR: ic § See 10

United States v. One 1958 Pontiac Coupe, 298 F.2d

Cee no ccoecovebusdocneeweecenas 10

United States v. South Half of Lot 7 & Lot 8, 910

F.2d 488 (8th Cir. 1990), cert. denied, 111 S. Ct.

os sethslbanadonnbeees 7,8

United States v. The Premises & Real Property at

614 Portland Ave., 846 F.2d 166 (2d Cir. 1988),

aff’g 670 F. Supp. 475 (W.D.N.Y. 1987) .............. 8-9

Wilmar Poultry Co. v. Morton-Norwich Products,

Inc., 520 F.2d 289 (8th Cir. 1975), cert. denied,

I I A is csalunsneeccuapoondabieckomssacuoence 9

IV

Constitution, statutes, and rule: Page

U.S. Const. :

Amend. VIII (Excessive Fines Clause) _...... 10-11

ne 2,5, 7, 8, 10, 11

ee I ns rch cama meacoeeuees 5, 10

Be aI ior ons in céesssnhaincedsatoxcdaditecenacee 5, 6, 7, 8, 9

NE RAMs Be ED nsec ceases scnsocccarcoennchecchaceucs 3, 5, 9,11, 12

Miscellaneous:

Measures Relating to Organized Crime: Hearings

On S. 30, S. 974, S. 975, S. 976, S. 1623, S. 1624,

S. 1861, S. 2022, S. 2122, and S. 2292 Before the

Subcomm. on Criminal Laws and Procedures of

the Senate Comm. on the Judiciary, 91st Cong.,

A I once ce eas io coiccndac anes cnet cease 8

In the Supreme Cont of the United States

OCTOBER TERM, 1990

No. 90-1630

ON LEONG CHINESE MERCHANTS

ASSOCIATION BUILDING, ET AL., PETITIONERS

VU.

UNITED STATES OF AMERICA

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App.

la-23a) is reported at 918 F.2d 1289. The opinion

of the district court granting the government’s motion

for summary judgment (App., infra, la-4a), and its

order denying petitioner’s motion for a continuance

(App., infra, 5a-7a), are unreported.

JURISDICTION

The judgment of the court of appeals was entered

on November 14, 1990. On February 7, 1991, Justice

Stevens extended the time within which to file a peti-

tion for a writ of certiorari to and including April

15, 1991, and the petition was filed on that date. The

(1)

2

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

1. In June 1988, the United States brought a fed-

eral court action seeking forfeiture of petitioner, the

On Leong Chinese Merchants Association Building

located in Chicago, Illinois. The complaint alleged

that the building had been used for an illegal gam-

bling operation, in violation of 18 U.S.C. 1955. The

complaint also sought forfeiture of $323,427.96 in

cash, cashiers checks totalling $2,500, gambling chips

and other gambling paraphernalia, and video equip-

ment. Pet. App. 4a.

The affidavit of FBI Special Agent James Whitmer,

which was attached to the complaint, detailed the

grounds for forfeiture. On September 2, 1984, Chi-

cago police officers entered the building with a warrant

and found several persons playing the gambling game

of Fan-Tan on the second floor. The officers arrested

16 persons and confiscated gambling equipment and

cash. Five months later, on February 22, 1985, po-

lice officers again raided the building. On this occa-

sion, the officers arrested 11 persons who were play-

ing Fan-Tan on the second floor, and seized gambling

equipment, chips, and cash. One year later, police

officers returned to the building and discovered a

gambling operation in the building’s basement. On

that occasion in March 1986, the officers arrested 18

persons and seized Fan-Tan gambling equipment,

gambling chips, and cash. Pet. App. 2a.

The government learned more about the continued

gambling operations in the building as a result of a

visit by an undercover FBI agent. On April 19, 1988,

the agent entered the second floor of the building

through a door equipped with closed circuit television

3

and an electronic buzzer. He saw at least 50 persons

playing Fan-Tan and another game, Pai-Gow, for

stakes as high as $4,000; he counted at least six

persons working at the gambling tables. The agent

purchased $500 in chips and placed bets. When the

agent won, he received 90% of his winnings; the

house kept the remaining 10%. Pet. App. 3a.

On the following evening, FBI agents executed

a warrant to search the building. When they entered

the building, over 100 persons were gambling. The

agents seized more than $300,000 in cash, gambling

chips worth $75,000, video equipment, and gambling

paraphernalia. During this raid, the agents saw

three corporate officers of the On Leong Chinese

Merchants Association present in the gambling room.

Pet. App. 3a-4a.

2. In response to the government’s action, the On

Leong Chinese Merchants Association filed a claim

to the building and initiated discovery proceedings.'

The government later successfully moved to stay dis-

covery pending completion of an ongoing criminal

investigation. In September 1988, the government—

based on the information outlined above—filed a mo-

tion for summary judgment with respect to forfeiture

of the building and other seized property. Petitioner

then filed a motion for a continuance of summary

judgment proceedings under Federal Rule of Civil

Procedure 56(f). Pet. App. 4a.’

1 We will refer to the Association and the building collec-

tively as petitioner.

2 Fed. R. Civ. P. 56(f) provides:

Should it appear from the affidavits of a party oppos-

ing the motion that the party cannot for reasons stated

present by affidavit facts essential to justify the party’s

opposition, the court may refuse the application for judg-

4

In May, 1989, the district court denied petitioner’s

motion to stay proceedings related to the building.

Pet. App. 4a; App., infra, 5a-7a.° The court found

that

the affidavits presented by the government * * *

are replete with detail concerning the circum-

stances which the government argues constitute

probable cause. [Petitioner] has identified no

specific testimony that it hopes to gain from de-

posing the affiants; it rests on general argu-

ments that it may be able to establish informa-

tion concerning the “basis, scope and accuracy of

their observations” which would make the affi-

davits less credible.

Id. at 6a-7a. “In light of the detail already pre-

sented in the affidavits,” the court concluded, peti-

tioner’s request for additional discovery was unwar-

ranted. Jd. at 7a. (citing DF Activities Corp v.

Brown, 851 F.2d 920 (7th Cir. 1988) ). Moreover, the

e-\*. held that petitioner’s alleged inability to obtain

“nferexation from its own witnesses because of the

penuing criminal investigation was not “a valid basis

for interrupting the civil action.” App., infra, 7a. In

the court’s view, petitioner’s position amounted to an

argument that “it possesses the relevant informa-

tion but is unwilling or unable to submit it.” J[bid.

3. In October 1989, the district court granted the

government’s motion for summary judgment and or-

dered the building forfeited. App., infra, la-4a. The

ment or may order a continuance to permit affidavits to

be obtained or depositions to be taken or discovery to be

had or may make such other order as is just.

3 The government agreed with petitioner to stay summary

judgment proceedings with respect to the other seized prop-

erty. Pet. App. 4a.

5

court first rejected petitioner’s contention that 18

U.S.C. 1955(d), which allows for the forfeiture of

“any property” used in violation of Section 1955, did

not authorize the forfeiture of real property. App.,

infra, 2a (citing cases). The court next held that

the government had established probable cause to

believe that the building was being used for iliegal

gambling in violation of Section 1955. In particular,

the court determined that the government had shown

that the building was used as “an illegal gambling

business” within the meaning of Section 1955(b) (1),

z.e., “that the business have a gross revenue of $2000

in a single day.” App., infra, 3a. The court pointed

to the government’s uncontroverted submission that

the undercover FBI agcnat “witnessed six bettors at

one table placing wagers of as much as $3000 to $4000,

and 25 to 30 bettors at another table placing wagers

of as much as $1500 to $2000.” Jbid.°

4. The court of appeals affirmed. Pet. App. la-23a.

It rejected petitioner’s contention that the district

court had improperly denied the motion for a contin-

uance under Fed. R. Civ P. 56(f). The court of ap-

peals found that petitioner

failed to specify any information it could pro-

duce by deposing either adverse witnesses or wit-

nesses under its control. Similarly [petitioner]

did not demonstrate that it would discover facts

4 Section 1955(d) provides in pertinent part:

Any property, including money, used in violation of the

provisions of this section may be seized and forfeited to

the United States.

5 The court of appeals upheld the district court’s probable

cause determination, Pet. App. 5a-10a, and petitioner has not

sought further review of that issue.

6

sufficient to rebut the government’s showing of

probable cause.

Pet. App. 12a. ‘Under these circumstances,” the

court held, “the district court did not abuse its dis-

cretion in refusing [petitioner’s] Rule 56(f) motion.”

Ibid.

The court also rejected petitioner’s contention that

Section 1955(d) does not authorize the forfeiture of

real property. The court determined that the lan-

guage of the statute—‘[a]ny property, including

money, used in violation of the provisions of this

section may be seized and forfeited to the United

States” (18 U.S.C. 1955(d))-is “unambiguous.”

Pet. App. 16a. Moreover, the court reviewed the per-

tinent legislative history and concluded that it “fur-

nishes no reason to depart from the plain meaning

of the statutory language.” Jd. at 17a. Finally, the

court pointed out that the “purpose of 18 U.S.C.

§ 1955(d) is best served by allowing the forfeiture of

real estate as well as personal property.” Pet. App.

19a.°

* Judge Cudahy filed a concurring opinion. In his view,

[sJeizure of the On Leong building may not be dis-

proportionate to the gambling offense here. It is, how-

ever, a three-story landmark structure with an unusual

cultural history and substantial economic value. A for-

feiture of this genre and magnitude may be authorized

and appropriate, but it seems * * * to mark a significant

departure in the enforcement of 18 U.S.C. § 1955.

Pet. App. 22a-23a.

7

ARGUMENT

1. Petitioner contends (Pet. 9-19) that Section

1955(d) does not provide for the forfeiture of real

property. Section 1955(d) authorizes the forfeiture

of “any property * * * used in violation” of Section

1955. ‘When used without qualification, the word

‘property’ includes hoth real and personal property

within its sweep.” United States v. South Half of

Lot 7 & Lot 8, 910 F.2d 488, 489 (8th Cir. 1990)

(en bane) (citing Fidelity d Deposit Co. v. Arenz,

290 U.S. 66, 68 (1933)), cert. denied, 111 S. Ct.

1389 (1991). In addition, Congress’s use of the word

“any” to modify “property” shows that it intended a

broad construction of that term. See United States

v. James, 478 U.S. 597, 605 (1986).’

Where, as here, the statutory language is unam-

biguous, “judicial inquiry is complete except in rare

and exceptional circumstances.” Demarest v. Man-

speaker, 111 S. Ct. 599, 604 (1991). In this case,

application of the plain terms of the statute does not

produce a result “demonstrably at odds with the in-

tentions of its drafters.” Griffin v. Oceanic Contrac-

7 Petitioner seeks to avoid the straightforward application

of the statutory terms by asserting that real property, such

as a building, “is not actually used ‘in violation’ of the provi-

sions of § 1955(a).”’ Pet. 13. That effort falls short the mark

where, as here, the record shows that patrons used the seized

building as a gambling hall for at least several] years.

Petitioner also argues (Pet. 13-14) that Congress’s incor-

poration into Section 1955(d) of customs law procedures ap-

plicable exclusively to personal property shows that Congress

did not intend to allow forfeiture of real property under Sec-

tion 1955(d). That argument fails, however, because Con-

gress has incorporated these procedures into several other

forfeiture provisions that plainly apply to real property. See

United States v. South Half of Lot 7 & Lot 8, 910 F.2d at 491.

8

tors, Inc., 458 U.S. 564, 571 (1982). There is there-

fore no occasion for the Court to accept petitioner’s

invitation (Pet. 14-15) to look beyond the plain lan-

guage of Section 1955, which unambiguously author-

izes forfeiture of the property at issue here.

In any event, petitioner’s invitation amounts to

analyzing one exchange between Senator McClellan,

the Chairman of the Senate subcommittee consider-

ing the original version of Section 1955(d), and the

Assistant Attorney General of the Criminal Division

of the Department of Justice. Senator McClellan

suggested to the Assistant Attorney General that “a

forfeiture provision that would cover the equipment,

adding machines, and money used in operating the

illegal [gambling] establishment” would be “helpful”

in achieving the purpose of the statute. See Pet.

15-16 (quoting Measures Relating to Organized

Crime: Hearings on S. 30, S. 974, S. 975, S. 976, S.

1628, S. 1624, S. 1861, S. 2022, S. 2122, and S. 2292

Before the Subcomm. on Criminal Laws and Proce-

dures of the Senate Comm. on the Judiciary, 91st

Cong., Ist Sess. 397 (1969)). The Assistant Attor-

ney General agreed, and the Department of Justice

later proposed legislation that became Section

1955(d) This brief exchange, involving one member

of Congress, scarcely shows that Congress intended

to exclude real property from the reach of the

statute.

Finally, both of the other courts of appeals that

have considered this issue have agreed with the court

below in construing Section 1955 to reach real prop-

erty. See United States v. South Half of Lot 7 & Lot

8, supra; United States v. The Premises d: Real Prop-

erty at 614 Portland Ave., 846 F.2d 166, 167 (2d

Cir. 1988) (per curiam), aff’g 670 F. Supp. 475

9

(W.D.N.Y. 1987). Further review is therefore un-

warranted.®

2. Petitioner also contends (Pet. 19-29) that the

district court erred in denying its motion for a con-

tinuance of summary judgment proceedings under

Federal Rule of Civil Procedure 56(f). Rule 56(f)

allows the district court to order a continuance of

summary judgment proceedings when the party op-

posing a motion for summary judgment ‘cannot for

reasons stated present by affidavit facts essential to

justify [its] opposition.” To obtain such a continu-

ance, a party must identify the information it needs

to oppose summary judgment and explain how that

information would create a genuine issue of material

fact sufficient to preclude summary judgment. See

Garrett v. City & County of San Francisco, 818 F.2d

1515, 1518 (9th Cir. 1987); Korf v. Ball State Uni-

versity, 726 F.2d 1222, 1229-1330 (7th Cir. 1984);

Wilmar Poultry Co. v. Morton-Norwich Products,

Inc., 520 F.2d 289, 297 (8th Cir. 1975), cert. denied,

424 U.S. 915 (1976).

In this case, the government’s affidavits showed

that the building had been used regularly as a gam-

bling establishment from 1984 until its seizure in

April 1988. See Pet. App. 2a-4a.° The government

8 Petitioner claims (Pet. 9-10) that review is necessary to

resolve a conflict between the three courts of appeals that

have held that Section 1955(d) extends to real property and

two district courts that have come to the opposite conclusion.

Such review would be premature until a conflict over the issue

developed among the courts of appeals.

®In addition to Agent Whitmer’s affidavit, the government

submitted the affidavit of the undercover agent who visited

the building and participated in illegal gambling the night

before the search.

16

therefore established ample probable cause to believe

that the building was being used in violation of Sec-

tion 1955."° In the face of this record, petitioner

claims (Pet. 24-25) that discovery might have

enabled it to develop equitable reasons why the dis-

trict court should not have ordered forfeiture.’ As

the court of appeals pointed out, however, ‘“‘the stat-

ute authorizing mitigation petitions, 19 U.S.C.

§ 1618, vests exclusive jurisdiction over remission or

mitigation of forfeitures * * * in the executive

branch.” Pet. App. 13a; see United States v. One

Clipper Bow Ketch Nisku, 548 F.2d 8, 12 (1st Cir.

1977) ; United States v. One 1958 Pontiac Coupe, 298

F.2d 421, 423 (7th Cir. 1962). Thus, the district

court could not have granted petitioner relief even if

it had come forward with equitable reasons support-

ing a remission of forfeiture. In any event, even if

the district court had the authority to decline to

order the building forfeited, that decision would de-

pend on factors external to the government’s showing

of probable cause, i.e., the nature, history, and use

of the building. Petitioner did not need discovery to

develop a record regarding these factors.

Petitioner also contends (Pet. 26-27) that addi-

tional discovery would have allowed it to develop an

argument that the building’s forfeiture violated the

Excessive Fines Clause of the Eighth Amendment.

Even if petitioner were correct that the Excessive

10 Section 1955(b) (1) defines an illegal gambling establish-

ment as one operating in violation of state gambling laws,

employing five or more persons, and continuing over 30 days.

See Pet. App. 2a-3a.

11 Petitioner did not raise this contention before the district

court—a procedural default recognized by the court of ap-

peals. See Pet. App. 13a.

11

Fines Clause applies to civil in rem forfeitures, but

see Pet. App. 14a (citing cases), it is difficult to see

how additional discovery would have allowed peti-

tioner to develop this claim. Nor does petitioner ex-

plain what information it could have obtained through

discovery that would have been relevant to this claim.

Such a speculative claim does not warrant a continu-

ance under Rule 56(f).

Lastly, petitioner argues (Pet. 27-29) that dis-

covery would have allowed it to develop a defense on

the merits of the forfeiture action. In particular,

petitioner claims that depositions of the government’s

affiants would have uncovered facts that would have

created a material issue of fact regarding whether

an “illegal gambling operation” within the meaning

of Section 1955 was being held in the building. Ac-

cording to petitioner, “[t]here are always questions

about ability to observe and inferences drawn from

observations which should be tested in some manner

before summary judgment is granted.” Pet. 28.

Rule 56(f), as the courts below recognized, does

not provide a vehicle for a party opposing summary

judgment to engage in a fishing expedition in the hope

that some evidence adverse to the moving party will

emerge. Petitioner has pointed to no substantive evi-

dence that it seeks to obtain that would controvert the

government’s showing of probable cause to believe

that the building was being used in violation of Sec-

tion 1955. Petitioner merely seeks to depose the gov-

ernment’s affiants with the wish that they will

contradict their affidavits or otherwise provide infor-

mation adverse to the government. The government’s

evidentiary submissions, however, detailed the gam-

bling activities at the building. In fact, petitioner has

abandoned its challenge to the government’s probable

12

cause showing. See note 5, supra. In these circum-

stances, the district court exercised sound discretion

in rejecting petitioner’s request for a continuance

under Rule 56(f).

CONCLUSION

The petition for a writ of certiorari should be

denied.

Respectfully submitted.

KENNETH W. STARR

Solicitor General

ROBERT S. MUELLER, III

Assistant Attorney General

J. DOUGLAS WILSON

Attorney

JUNE 1991

APPENDIX A

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

No. 88 C 5205

UNITED STATES OF AMERICA, PLAINTIFF

Vv.

ON LEONG CHINESE MERCHANTS

ASSOCIATION BUILDING, ET AL., DEFENDANTS

[Filed Oct. 13, 1989]

MEMORANDUM OPINION AND ORDER

I. INTRODUCTION

In this action, the government seeks the forfeiture

of the On Leong Chinese Merchants Association

Building (the ‘“Building’”’), cash, and various other

items allegedly used in violation of 18 U.S.C. § 1955.

The government moved for summary judgment on

September 22, 1988. The claimant then moved for a

continuance of summary judgment proceedings pur-

suant to Fed.R.Civ.P. 56(f). The government agreed

to such a continuance with respect to all of the de-

fendant properties with the exception of the Build-

(la)

2a

ing. On May 9, 1989, the Court determined that

summary judgment proceedings should proceed with

respect to the Building, and it set a briefing schedule.

Pending, then, is the motion for summary judgment

with respect to the Building.

Claimants first argue that the Building is not sub-

ject to forfeiture under § 1955 because, although the

statute provides that “any property” may be seized,

it does not specifically provide for the forfeiture of

real property. The majority of the courts which have

considered whether real property is forfeitable under

§ 1955 have answered that question in the affirma-

tive. See United States v. Premises and Real Prop-

erty at 614 Portland Ave., 846 F.2d 166, 167 (2d

Cir. 1988), aff’'g per curiam, 670 F.Supp. 475

(W.D.N.Y. 1987); United States v. Various Denomi-

nations of Currency and Coin Totalling $4280.45,

628 F.Supp. 4 (S.D.W. Va. 1984); United States v.

Bonanno Organized Crime Family, 683 F.Supp. 1411,

1458-60 (E.D.N.Y. 1988), aff'd on other grounds,

879 F.2d 20 (2d Cir. 1989). But see United States v.

Building & Property known as 123-125 East Twelfth

St., 527 F.Supp. 1167 (W.D. Pa. 1981) (real prop-

erty not subject to forfeiture) ; DiGiacomo v. United

States, 346 F. Supp. 1009 (D. Del. 1972) (same).

The claimants cite only United States v. South Half

of Lot 7 and Lot 8, 876 F.2d 1362 (8th Cir. 1989),

which held that real property is not subject to for-

feiture. However, after the motion for summary

judgment was fully briefed, the Eighth Circuit va-

cated that order pending rehearing en bance. United

States v. Unit No. 7 and Unit No. 8 of Shop, 883

F.2d 53 (8th Cir. 1989). This Court agrees with the

majority view and holds that real property is forfeit-

able under § 1955.

3a

The claimants next argue that the government has

not established probable cause in this case. The

claimants focus on § 1955(b)(1) (iii), which re-

quires, for purposes of this case, that the business

have a gross revenue of $2000 in a single day.’ The

claimants argue that the affidavits submitted by the

government do not establish probable cause to believe

that $2000 in gross revenue was received in a single

day. Initially, the Court notes that gross revenue,

for purposes of § 1955, is defined as the total amount

of money wagered rather than net profit. See United

States v. Zemek, 634 F.2d 1159, 1177 (9th Cir.

1980), cert. denied, 450 U.S. 916, 101 S.Ct. 1359

(1981); United States v. Rotchford, 575 F.2d 166,

174 (8th Cir. 1978). In this case, FBI Special Agent

George Ng states in his affidavit that he witnessed

six bettors at one table placing wagers of as much as

$3000 to $4000, and 25 to 30 bettors at another table

placing wagers of as much as $1500 to $2000. The

claimants have submitted no evidence which would

tend to show that the $2000 gross revenue require-

ment has not been met.? Agent Ng’s uncontroverted

' Section 1955 (b) (1) provides:

“{I]llegal gambling business” means a gambling business

which—

(i) is a violation of the law of a State or political subdi-

vision in which it is conducted;

(ii) involves five or more persons who conduct, finance,

manage, supervise, direct, or own all or part of such busi-

ness ; and

(iii) has been or remains in substantially continuous

operation for a period in excess of thirty days or has a

gross revenue of $2,000 in any single day.

* The claimants argue that the pendency of a criminal inves-

tigation has interfered with their ability to present evidence.

This argument was rejected in the Court’s minute order of

4a

affidavit clearly establishes probable cause to believe

that the gross revenue requirement was established.

The Court finds that the government has estab-

lished probable cause to believe that the defendant

Building is subject to forfeiture. The government’s

motion for summary judgment with respect to the

Building is therefore granted.

ENTER:

/s/ Ilana Diamond Rovner

ILANA DIAMOND ROVNER

United States District Judge

Dated: October 13, 1989

May 9, 1989, and the Court does not find that the claimed

inability to present evidence, in the circumstances of this

case, precludes entry of summary judgment.

5a

APPENDIX B

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

No. 88 C 5205

UNITED STATES

Vv.

ON LEONG CHINESE ASSOCIATION

BUILDING, ET AL.

{Filed May 9, 1983]

ORDER

This is a civil forfeiture action involving the On

Leong Chinese Merchants Association Building (the

“Building”’), cash, and various other items allegedly

used in violation of U.S.C. § 1955, which prohibits

illegal gambling businesses. The government moved

for summary judgment on September 27, 1988. That

motion has not been fully briefed. Rather than filing

a response, claimant moved for a continuance of sum-

mary judgment proceedings pursuant to Fed. R. Civ.

P. 56(f). The government agreed to such a continu-

6a

ance with respect to all of the defendant properties

with the exception of the Building.

With respect to the Building, the government ar-

gued that a continuance was not warranted, relying

on DF Activities Corp. v. Brown, 851 F.2d 920 (7th

Cir. 1988). In that case, the defendant in a contract

dispute moved for dismissal on the basis of a statute

of frauds defense, and submitted an affidavit denying

that she had entered into the alleged contract. The

plaintiff argued that it should have an opportunity

to engage in discovery. The court of appeals, affirm-

ing the district court, held that dismissal was proper

and that there was no point in keeping the lawsuit

alive in light of the unlikelihood that the defendant

would testify in a deposition contrary to the state-

ments in her affidavit. 851 F.2d at 922. Judge

Flaum, in dissent, agreed that the district courts

have broad discretion to determine the limits of per-

missible discovery, but argued that the dismissal

should have been vacated because the affidavit did not

contain a blanket denial that any agreement was

reached. 851 F.2d at 925. Thus deposing defendant

“would not necessarily be a futile effort.” Jd.

Claimant argues that DF Activities is inapplicable

here because claimant wishes “to depose the govern-

ment’s affiants, not in order to trick them into revers-

ing their positions, but to ascertain the basis, scope,

and accuracy of their observations.” (Amended

Mem. in Support of Claimant’s Rule 56(f) Motion at

5 n.2.) The Court disagrees, and finds that the cir-

cumstances here support proceeding with the sum-

mary judgment motion even more so than in DF

Activities. In contrast to the evasive affidavit at is-

sue in DF Activities, the affidavits presented by the

government in this case are replete with detail con-

cerning the circumstances which the government ar-

7a

gues constitute probable cause. Claimant has identi-

fied no specific testimony that it hopes to gain from

deposing the affiants; it rests on general arguments

that it may be able to establish information concern-

ing the “basis, scope and accuracy of their observa-

tions” which would make the affidavits less credible.

In light of the detail already presented in the affi-

davits, depositions with those goals would be at least

as futile as the deposition of the defendant in DF

Activities.

Claimant also argues that the stay of discovery

prevents it from obtaining affidavits from the per-

sons within its own control, because those persons

may be at risk in the criminal prosecutior. This is an

argument entirely unrelated to the stay of discovery

itself. Claimant essentially argues that it possesses

the relevant information but is unwilling or unable

to submit it. The Court does not find this to be a

valid basis for interrupting the civil action.

Accordingly, the Court will proceed with the gov-

ernment’s motion for summary judgment. Claim-

ant’s response to the motion is due June 6, 1989. The

government’s reply is due July 7, 1989.

/s/ Tlana D. Revner

ILANA D. ROVNER

Uv. S. GOVERNMENT PRINTING OFricc; 1991 282061 20588