United States v. All Funds and Other Property on Deposit in the Nineteen Bank…

Background

The United States filed this civil forfeiture case in 2012, seeking forfeiture of funds and other property in nineteen bank accounts and seven pieces of real property. Soundaryamma Chennareddy filed a notice of claim and an answer asserting an interest in two bank accounts. The government’s claims concerning the other property were resolved, but Chennareddy’s claims remained pending.

Chennareddy took no further action for about thirteen years. In 2021, the government contacted her lawyer, Barry Coburn, about the status of the claim. Coburn responded that he was no longer involved in the matter and had lost contact with Chennareddy, although he remained her lawyer of record. The government later stated that it could not locate Chennareddy’s contact information and that she had left the United States in 2009 and had not returned. The court then ordered Chennareddy to show why her claim should not be dismissed for failure to prosecute. Coburn responded that he still had no way to contact her.

Legal standard

The court explained that Federal Rule of Civil Procedure 16(f) allows a court to impose a just order, including sanctions under Rule 37(b)(2)(A), when a party fails to attend a scheduling conference or obey a pretrial order. The court also noted that Rule 41(b) can allow dismissal when a party fails to prosecute or comply with court rules or a court order. Because courts disagree about using Rule 41(b) to dismiss a claim in a civil forfeiture case, the court evaluated the claim only under Rule 16(f), while stating that dismissal would likely be appropriate under either rule.

The court considered four factors: the party’s willfulness or reason for noncompliance, whether lesser sanctions would work, the length of the noncompliance, and whether the party had been warned about the consequences. The court could not find that Chennareddy’s failure was willful because she had left the United States and there was no indication that she knew about the order to show cause. But it found that her lengthy lack of participation, lack of contact with her lawyer, and the prior warning supported dismissal. The court also concluded that a lesser sanction would likely be ineffective.

Disposition

The court dismissed Chennareddy’s claim under Federal Rule of Civil Procedure 16(f)(1). Because no other claims remained concerning the relevant property, the Clerk of Court was directed to enter a default judgment in favor of the United States and against: (1) all funds in Bank of America Account No. 4032028150, held in the name of Kaveri International Inc., doing business as McCreade Information Technology; and (2) all funds in PNC Bank Account No. 802999866, held in the name of Soundaryamma Chennareddy. The Clerk was also directed to close the case.