United States District Court, E.D. North Carolina, Western Division
JAMES C. FOX, District Judge.
This matter is before the court on a Motion to Dismiss or, Alternatively, Motion for Partial Summary Judgment filed by Claimants Rob Anderson et al. [DE-46], Claimants Josh Alonzo et al. [DE-68], Mark Greene [DE-79], and Kevin Gerard Jackson [DE-96]; as well as on Claimant AdamS. Forman's Motion to Dismiss [DE-53]. The matters have been fully briefed and are ripe for ruling. For the reasons stated herein, the motions are DENIED.
I. PROCEDURAL AND FACTUAL BACKGROUND
This matter arises out of the seizure of around fifty Land Rover motor vehicles after their alleged illegal importation. See Second Amended Complaint for Forfeiture In Rem [DE-9] (Attachment A) at ¶ 2. On January 24, 2014, the United States of America filed a complaint against the defendant vehicles. See Complaint for Forfeiture In Rem [DE-1]. Two subsequent amendments to the complaint have resulted in the SAC [DE-9], which is the subject of the present motions to dismiss. The allegations of the SAC, which the court must accept as true for purposes of this motion, show the following.
When motor vehicles are imported to the United States, they are subject to a number of safety and environmental requirements. See Declaration [DE-9] at ¶ 12. However, Congress has passed certain exemptions from these requirements. Id. at ¶ 13. Specifically, vehicles that are more than twenty-one years old when imported are not subject to Environmental Protection Agency ("EPA") regulations, and vehicles more than twenty-five years old when imported are not subject to United States Department of Transportation ("DOT") safety compliance requirements. Id. "The age of the imported vehicle is determined by subtracting the calendar date of manufacture from the calendar date of importation." Id. "If the calendar date of manufacture is unavailable, the importer may substitute the calendar date the vehicle was first sold or a registration document showing that the vehicle was registered at least 25 years ago." Id.
When a vehicle enters the United States, the importer must submit an EPA form to the Customs and Border Protection ("CBP"). Id. at ¶ 14. If the vehicle is at least twenty-one years old, the importer may declare Code E on the form, which states, "Vehicles at least twenty one years old... and in original unmodified configuration [are] either exempted or excluded from EPA emission requirements...." Id. Similarly, the importer must also submit DOT form HS-7. Id. at ¶ 15. On this form, an importer may check box 1 to claim that the vehicle is at least 25 years old, and thus exempt from DOT safety requirements. Id.
On September 7, 2012, Aaron Richardet was presented with two Land Rovers to be imported at the port of Wilmington, North Carolina. See id. at ¶ 8. Mr. Richardet is a sales agent for Patterson Auto Sales, a North Carolina retail vehicle dealership and registered importer. Id. at ¶¶ 16-17. According to entry documents submitted by Mr. Richardet's brokers, the vehicles were a 1983 and a 1986 Defender 110 Land Rover vehicles. Id. at ¶ 8. However, during an initial inspection of the vehicles, a CBP Officer noted that certain vehicle features were inconsistent with the manufacturing year stated on the entry documents. Id. The CBP forwarded photographs and other information to the DOT, which in turn consulted with Land Rover North America. Id. at ¶ 9. Land Rover North America determined that the vehicles were not in their original factory condition and that there were various discrepancies between what the entry papers claimed the vehicles to be and what the features actually showed the vehicles to be. Id. For example, the engine of the first vehicle was manufactured sometime between 1997 and 2007 (and could not be retrofitted onto a 1986 chassis, which was the year stated by the entry papers), and the chassis of the first vehicle was built in 2006. Id. Similarly, the second vehicle, which according to its entry papers was a 1983 model Land Rover, had a rear axle box from a 2004 model Land Rover and a chassis that was built in 2006. Id.
On or about October 25, 2012, the CBP sent a list of 110 VIN numbers-all for vehicles imported by Patterson Auto Sales and Richardet through the Wilmington seaport-to John Kobylarz, a safety compliance manager for Jaguar Land Rover North America. Id. at ¶ 19. The list included inquiries to Land Rover North America, asking it "to identify the date of production of the vehicle, engine number and type, transmission number, model number and year, rear axle number, transfer box number, original color of vehicle, country where manufactured, and the country to which the vehicle was first delivered." Id. CBP submitted three additional questions regarding each vehicle: (a) whether the vehicle "was manufactured to comply with all applicable federal motor vehicle safety standards (FMVSS) of the United States;" (b) whether the original manufacturer had affixed a label to the vehicle certifying compliance with all applicable FMVSS; and (c) whether the vehicle "was manufactured to comply with U.S. emissions standards." Id.
On or about January 23, 2013, Kobylarz returned the list with the requested information. Id. at ¶ 20. With that information, CBP determined that of the vehicles listed, fifty-one of the vehicles "were not eligible to be imported into the United States under the 25 year rule because the production date of the vehicle and the importation date were less than 25 years." Id. Furthermore, "[a]ccording to Jaguar Land Rover North America, none of the 110 vehicles were manufactured to comply with the applicable FMVSS standards of the United States, ... nor did the vehicles comply with U.S. emissions standards." Id. Thus, while fifty-one vehicles had been imported under the twenty-five year rule, those fifty-one vehicles (1) were instead less than twenty-five years old at the time they were imported, and (2) did not comply with the requirements of vehicles less than twenty-five years old (the DOT requirements) or less than twenty-one years old (the EPA requirements). The government has brought this action for forfeiture of the seized vehicles. The claimants have moved to dismiss.
The purpose of a motion to dismiss under Rule 12(b)(6) is to test the legal sufficiency of the complaint, not to resolve conflicts of fact or to decide the merits of the action. Edwards v. City of Goldsboro, 178 F.3d 231, 243-44 (4th Cir. 1999). In considering a motion to dismiss, the court assumes the truth of all facts alleged in the complaint and the existence of any fact that can be proved, consistent with the complaint's allegations. Erickson v. Pardus, 551 U.S. 89, 94 (2007); E. Shore Mkts., Inc. v. J.D. Assocs. Ltd. P'shp, 213 F.3d 175, 180 (4th Cir. 2000). However, the "[:fJactual allegations must be enough to raise a right to relief above the speculative level' and have enough facts to state a claim to relief that is plausible on its face.'" Wahi v. Charleston Area Med. Ctr., Inc., 562 F.3d 599, 615 n.26 (4th Cir. 2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). "[A] plaintiff's obligation to provide the grounds' of his entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly, 550 U.S. at 555 (citations omitted); see also Iqbal, 556 U.S. at 678. Moreover, a court "need not accept the legal conclusions drawn from the facts" nor "accept as true unwarranted inferences, unreasonable conclusions, or arguments." E. Shore Mkts., 213 F.3d at 180. The court may consider "documents incorporated into the complaint by reference, and matters of which a court may take judicial notice" when deciding a Rule 12(b)(6) motion. Tellabs, Inc. v. Makar Issues & Rights, Ltd., 551 U.S. 308, 322 (2007).
A complaint in a forfeiture action must further "state sufficiently detailed facts to support a reasonable belief that the government will be able to meet its burden of proof at trial." See Fed.R.Civ.P. Supplemental Admiralty and Maritime Claims Rule G(2)(f). Indeed, the standard imposed is "somewhat more exacting than the liberal notice pleading standard contemplated by Rule 8(a)(2)." See United States v. One Gulfstream G-V Jet Aircraft, 941 F.Supp.2d 1, 14 (D.D.C. 2013). However, "[a]t the pleading stage, it suffices for the government to simply allege enough facts so that the claimant may understand the theory of forfeiture, file a responsive pleading, and undertake an adequate investigation." Id. (citing United States v. Mondragon, 313 F.3d 862, 864 (4th Cir. 2002)). In other respects, a motion to dismiss a complaint for forfeiture in rem follows the standards under Rule 12(b)(6). One Gulfstream, 941 F.Supp.2d at 14.
The Claimants raise a number of reasons why the SAC should be dismissed. These grounds include (1) the statute of limitations bars the present action; (2) the complaint fails to meet the pleading standards set out in Twombly; (3) the complaint lacks probable cause; and (4) the complaint is moot because the vehicles are now in compliance with ...