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Riveira v. Dresch

United States District Court, W.D. Washington, Seattle

July 18, 2019

EDWARD RIVEIRA JR., et al., Plaintiffs,
SCOTT DRESCH, in his individual capacity, and DOES 1-10, Defendants.


          John C. Coughenour United States District Judge.

         This matter comes before the Court on Defendant's motion to dismiss Plaintiffs' second amended complaint (Dkt. No. 53). Having thoroughly considered the parties' briefing and the relevant record, the Court finds oral argument unnecessary and hereby GRANTS the motion for the reasons explained herein.

         I. BACKGROUND

         In 1989, Plaintiffs Edward and Amanda Riveira founded Absolute Mobility Center (“AMC”), a business based out of their home. (Dkt. No. 51 at 2-3.) AMC sells wheelchair-accessible vehicles, supplied by Indiana-based Braun Corporation (“Braun”), and other mobility-assistance devices to customers, including veterans. (Id.) When qualified veterans purchase AMC vehicles, “the [U.S. Department of Veterans Affairs (the “VA”)] would reimburse AMC certain costs associated with the transaction. This includes the cost of shipping the vehicles from Indiana [Braun's location].” (Id. at 20.) Since starting the business, Plaintiffs have established AMC offices outside of their home. (See Id. at 34.)

         Defendant Scott Dresch is a Special Agent with the Internal Revenue Service's Criminal Investigation Division. (Id. at 4.) On August 17, 2015, Defendant swore an affidavit requesting search warrants in order to investigate Plaintiffs' alleged violations of provisions of the U.S. tax code, 18 U.S.C. §§ 287, 641, and 1001, as well as 26 U.S.C. § 7206(1). (Dkt. Nos. 51-1, 53 at 3.) The Honorable James P. Donohue, U.S. Magistrate Judge, issued the warrants. (Dkt. Nos. 51-2, 51-3, 51-4.)

         On the morning of August 19, 2015, armed federal agents arrived at Plaintiffs' home while Mr. Riveira was present. (Dkt. No. 51 at 33.) At about the same time, Mrs. Riveira was pulled over by a Snohomish County Sheriff patrol car and another unmarked car while she drove through Plaintiffs' neighborhood. (Id.) After being detained for about 25 minutes, Mrs. Riveira was brought to Plaintiffs' home, and Plaintiffs were kept outside under armed guard while agents searched their home. (Id.) Agents also raided Plaintiffs' offices in Woodinville and Tacoma while AMC customers and employees were there, seizing records and computers. (Id. at 34.)

         In March 2018, the U.S. Attorney's Office ceased its investigation into Plaintiffs' alleged criminal conduct without charging Plaintiffs. (Id. at 34-35.) Plaintiffs claim that they continue to experience financial, emotional, and reputational harms as a result of the agents' search of their home and offices. (Id. at 35-36.) On August 16, 2018, Plaintiffs sued Defendant in his individual capacity for allegedly violating Plaintiffs' Fourth Amendment rights against unreasonable searches and seizures. (Dkt. No. 1.) Plaintiffs later amended their complaint to revise examples from AMC account records, revise the number of boxes of records that were seized, and to add allegations regarding a confidential source (“CS1”) who provided information contained in Defendant's warrant application. (See Dkt. No. 10.)

         Defendant filed a motion to dismiss Plaintiffs' amended complaint for failure to state a claim and asserting a qualified immunity defense. (See Dkt. No. 33.) The Court permitted Plaintiffs to file a second amended complaint, in which they asserted additional factual allegations related to Defendant's qualified immunity defense. (See Dkt. Nos. 45-1, 51.) Plaintiffs allege that the raids of their home and offices were based on overly broad and unparticularized warrants. (See Dkt. No. 51 at 6, 32.) Plaintiffs assert that Defendant obtained these warrants by knowingly and/or recklessly misrepresenting information about Plaintiffs' finances and transactional history, Plaintiffs' bookkeeping system, AMC's audit, and the credibility of CS1, a former AMC employee from whom Defendant obtained information to support his warrant affidavit. (See Id. at 6-17.) Plaintiffs also allege that Defendant knowingly misrepresented the VA's cost reimbursement policy. (See Id. at 17-32.) In response to Plaintiffs' second amended complaint, Defendant filed a renewed motion to dismiss raising the same claims and defenses. (See Dkt. Nos. 49 at 1, 53.)


         A. Motion to Dismiss Legal Standard

         A party may move for dismissal if the claimant “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). A claim for relief must include “a short and plain statement of the claim showing that the pleader is entitled to relief; and . . . a demand for the relief sought . . . .” Fed.R.Civ.P. 8(a). The statement must put a party on fair notice of the claim and its grounds. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In reviewing a motion to dismiss, the Court accepts all factual allegations as true and views them in the light most favorable to the nonmoving party, but need not accept conclusory allegations, unwarranted deductions of fact, or unreasonable inferences as true. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). To survive a motion to dismiss, a claim must be “plausible” in that the facts pled “allow[] the court to draw [a] reasonable inference” that a defendant is liable for the misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Determining plausibility is “context-specific” and “requires the reviewing court to draw on its judicial experience and common sense.” Id. at 679.

         B. Qualified Immunity Legal Standard

         Government officials are immune from civil liability if “in performing discretionary functions . . . their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). This standard is a low bar-qualified immunity protects “all but the plainly incompetent or those who knowingly violate the law.” Ashcroft v. al-Kidd, 563 U.S. 731, 743 (2011) (quoting Malley v. Briggs, 475 U.S. 335, 341 (1986)). For purposes of a motion to dismiss, the Court applies the Harlow standard to the official's conduct “as alleged in the complaint.” Behrens v. Pelletier, 516 U.S. 299, 309 (1996).

         To overcome a qualified immunity defense, a party must show that he or she experienced a violation of a constitutional right and that the right was clearly established at the time of the official's alleged misconduct. Pearson v. Callahan, 555 U.S. 223, 232, 236 (2009) (citing Saucier v. Katz, 533 U.S. 194 (2001)). If a party claims that the constitutional violation arose from the official's deceptive or reckless preparation of an affidavit for a search warrant, then the party must “make[] a substantial preliminary showing that a false statement knowingly and intentionally, or with reckless disregard for the truth, was included by the affiant in the warrant affidavit, and [that] the allegedly false statement is necessary to the finding of probable cause.” Franks v. Delaware, 438 U.S. 154, 155-56 (1978); see also Chism v. Washington State, 661 F.3d 380, 386 (9th Cir. 2011) (describing such inquiry as a showing of “judicial deception”). If the party makes such a showing, he or she is entitled to a hearing. Id. If the party fails to do so, the affidavit is presumed valid. Id. at 171. The Harlow question of reasonableness essentially “merges” with the Franks question of dishonesty or recklessness. See Butler v. Elle, 281 F.3d 1014, 1024 (9th Cir. 2002).

         C. Fourth Amendment Search and Seizure Legal Standard

         The Fourth Amendment protects a person's rights “to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” U.S. Const. amend. IV. Fourth Amendment protections extend to seizures that are less than arrests and to all intrusions by public agents on personal security, in both civil and criminal investigations. Terry v. Ohio, 392 U.S. 1, 16-17 (1968); City of Ontario, Cal. v. Quon, 560 U.S. 746, 755 (2010). There is “no ready test for determining reasonableness other than by balancing the need to search against the invasion which the search entails.” Camara v. Mun. Court of City & Cty. of San Francisco, 387 U.S. 523, 536-37 (1967). Where a search warrant is mandated, “reasonableness” of search and seizure is measured in terms of whether “probable cause” exists to conduct the search. Id. at 534. ...

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