ON LEONG CHINESE MERCHANTS ASSOCIATION BUILDING, ET AL., PETITIONERS V. UNITED STATES OF AMERICA No. 90-1630 In The Supreme Court Of The United States October Term, 1990 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 TABLE OF CONTENTS Questions presented Opinions below Jurisdiction Statement Argument Conclusion OPINIONS BELOW The opinion of the court of appeals (Pet. App. 1a-23a) is reported at 918 F.2d 1289. The opinion of the district court granting the government's motion for summary judgment (App., infra, 1a-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 petition for a writ of certiorari to and including April 15, 1991, and the petition was filed on that date. The jurisdiction of this Court is invoked under 28 U.S.C. 1254(1). 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 forfeiture of real property. 2. Whether the district court abused its discretion in denying petitioner's motion for a continuance of summary judgment proceedings under Federal Rule of Civil Procedure 56(f). STATEMENT 1. In June 1988, the United States brought a federal 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 gambling 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 equipment. 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, Chicago 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, police officers again raided the building. On this occasion, the officers arrested 11 persons who were playing 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 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. /1/ The government later successfully moved to stay discovery pending completion of an ongoing criminal investigation. In September 1988, the government -- based on the information outlined above -- filed a motion 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. /2/ In May, 1989, the district court denied petitioner's motion to stay proceedings related to the building. Pet. App. 4a; App., infra, 5a-7a. /3/ The court found that the affidavits presented by the government * * * are replete with detail concerning the circumstances which the government argues constitute probable cause. (Petitioner) has identified 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 concerning the "basis, scope and accuracy of their observations" which would make the affidavits less credible. Id. at 6a-7a. "In light of the detail already presented in the affidavits," the court concluded, petitioner's request for additional discovery was unwarranted. Id. at 7a. (citing DF Activities Corp v. Brown, 851 F.2d 920 (7th Cir. 1988)). Moreover, the court held that petitioner's alleged inability to obtain information from its own witnesses because of the pending 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 information but is unwilling or unable to submit it." Ibid. 3. In October 1989, the district court granted the government's motion for summary judgment and ordered the building forfeited. App., infra, 1a-4a. The 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). /4/ The court next held that the government had established probable cause to believe that the building was being used for illegal 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), i.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 agent "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." Ibid. /5/ 4. The court of appeals affirmed. Pet. App. 1a-23a. It rejected petitioner's contention that the district court had improperly denied the motion for a continuance under Fed. R. Civ P. 56(f). The court of appeals found that petitioner failed to specify any information it could produce by deposing either adverse witnesses or witnesses under its control. Similarly (petitioner) did not demonstrate that it would discover facts 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 discretion 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 language 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 pertinent legislative history and concluded that it "furnishes no reason to depart from the plain meaning of the statutory language." Id. at 17a. Finally, the court pointed out that the "purpose of 18 U.S.C. Section 1955(d) is best served by allowing the forfeiture of real estate as well as personal property." Pet. App. 19a. /6/ 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 both 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 banc) (citing Fidelity & 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). /7/ Where, as here, the statutory language is unambiguous, "judicial inquiry is complete except in rare and exceptional circumstances." Demarest v. Manspeaker, 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 intentions of its drafters." Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 571 (1982). There is therefore no occasion for the Court to accept petitioner's invitation (Pet. 14-15) to look beyond the plain language of Section 1955, which unambiguously authorizes 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 considering 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. 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., 1st Sess. 397 (1969)). The Assistant Attorney 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 property. See United States v. South Half of Lot 7 & Lot 8, supra; United States v. The Premises & Real Property at 614 Portland Ave., 846 F.2d 166, 167 (2d Cir. 1988) (per curiam), aff'g 670 F. Supp. 475 (W.D.N.Y. 1987). Further review is therefore unwarranted. /8/ 2. Petitioner also contends (Pet. 19-29) that the district court erred in denying its motion for a continuance 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 opposing a motion for summary judgment "cannot for reasons stated present by affidavit facts essential to justify (its) opposition." To obtain such a continuance, 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 University, 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 gambling establishment from 1984 until its seizure in April 1988. See Pet. App. 2a-4a. /9/ The government therefore established ample probable cause to believe that the building was being used in violation of Section 1955. /10/ In the face of this record, petitioner claims (Pet. 24-25) that discovery might have enabled it to develop equitable reasons why the district court should not have ordered forfeiture. /11/ As the court of appeals pointed out, however, "the statute authorizing mitigation petitions, 19 U.S.C. Section 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 supporting 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 depend 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 additional 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 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 petitioner to develop this claim. Nor does petitioner explain what information it could have obtained through discovery that would have been relevant to this claim. Such a speculative claim does not warrant a continuance under Rule 56(f). Lastly, petitioner argues (Pet. 27-29) that discovery 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. According 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 evidence 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 Section 1955. Petitioner merely seeks to depose the government's affiants with the wish that they will contradict their affidavits or otherwise provide information adverse to the government. The government's evidentiary submissions, however, detailed the gambling activities at the building. In fact, petitioner has abandoned its challenge to the government's probable cause showing. See note 5, supra. In these circumstances, 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 /1/ We will refer to the Association and the building collectively as petitioner. /2/ Fed. R. Civ. P. 56(f) provides: Should it appear from the affidavits of a party opposing 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 judgment 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 property. Pet. App. 4a. /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/ Judge Cudahy filed a concurring opinion. In his view, (s)eizure of the On Leong building may not be disproportionate to the gambling offense here. It is, however, a three-story landmark structure with an unusual cultural history and substantial economic value. A forfeiture 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. Section 1955. Pet. App. 22a-23a. /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 provisions of Section 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 incorporation into Section 1955(d) of customs law procedures applicable exclusively to personal property shows that Congress did not intend to allow forfeiture of real property under Section 1955(d). That argument fails, however, because Congress 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/ 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. /9/ 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. /10/ Section 1955(b)(1) defines an illegal gambling establishment 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 appeals. See Pet. App. 13a. APPENDIX