UNITED STATES v. WE BUILD THE WALL INC (2021)

SUMMARY ORDER

Interested-Party-Appellant We Build the Wall, Inc. (“WBTW”) appeals from the December 14, 2020 order of the United States District Court for the Southern District of New York (Torres, J.) denying its motion to modify the government's restraining order against its bank accounts or for a hearing on the subject. On August 20, 2020, the government unsealed an indictment charging several individuals with a scheme to defraud through an online fundraising campaign for WBTW, allegedly a private organization dedicated to building a wall on the border between the United States and Mexico. On August 24, 2020, the district court found probable cause existed for forfeiture of the funds in certain WBTW bank accounts and issued a sealed order restraining the funds. WBTW seeks a vacatur of the restraint or, in the alternative, an opportunity to contest the order in a pre-trial hearing below. We assume the parties’ familiarity with the underlying facts, procedural history, and specification of issues for review.

WBTW states that we have jurisdiction pursuant to 28 U.S.C. §§ 1291 and 1292(a)(1). The government argues that the appeal is neither from a final order nor from the denial of a request to modify an injunction, and, therefore, it is not reviewable under either statute. We agree with the government.

Section 1292(a)(1) permits an appeal as of right from “[i]nterlocutory orders of the district courts ․ granting, continuing, modifying, refusing or dissolving injunctions[.]” “Because § 1292(a)(1) was intended to carve out only a limited exception to the final-judgment rule, we ․ construe[ ] the statute narrowly[.]” Carson v. Am. Brands, Inc., 450 U.S. 79, 84, 101 S.Ct. 993, 67 L.Ed.2d 59 (1981). In accordance with this instruction, we have held that this statute is limited to traditional orders in equity and those orders, issued pursuant to statutory authority, that have “the practical effect of a preliminary injunction ․ [and that] the appealing party demonstrates [pose] serious, perhaps irreparable consequences.” Korea Shipping Corp. v. New York Shipping Ass'n, 811 F.2d 124, 126 (2d Cir. 1987) (internal quotation marks omitted). In this case, the funds were restrained pursuant to the statutory authority provided to the district court by the interaction of 18 U.S.C. § 981(c), 21 U.S.C § 853(e), and 28 U.S.C. § 2461(c).

WBTW argues that its appeal falls within that category of injunction-like orders that are appealable under § 1292(a)(1) when the preliminary relief “effectively shuts down an ongoing business.” United States v. All Assets of Statewide Auto Parts, Inc., 971 F.2d 896, 901 (2d Cir.1992). However, WBTW acknowledges that it has continued to receive funds after the restraining order was issued, and the government does not contest its right to use these funds. Furthermore, WBTW remains able to transact certain business, as it has paid to lift a temporary administrative dissolution in Florida. WBTW cannot show that the restraining order has effectively shut down the business. Accordingly, the restraining order is not appealable as an injunction under 28 U.S.C. § 1292(a)(1).

Alternatively, WBTW argues that we have jurisdiction under Section 1291, as the restraint is an appealable collateral order. In the ordinary course of a criminal case, we do not review “decisions made before sentencing is complete and a judgment of conviction has been entered.” United States v. Robinson, 473 F.3d 487, 490 (2d Cir. 2007). In United States v. Aliotta, we set out a three-part test for appellate review of a collateral order: “an order must (1) conclusively determine the disputed question, (2) resolve an important issue completely separate from the merits of the action, and (3) be effectively unreviewable on appeal from a final judgment.” 199 F.3d 78, 82 (2d Cir. 1999).

WBTW cannot satisfy the Aliotta test. First, the restraint does not conclusively determine anything about the disputed funds, as there will be post-conviction proceedings to assess legal claims to the funds. See 21 U.S.C. § 853(n). Second, although WBTW argues that its position is not relevant to the merits of the case, as the government notes, WBTW objects to the government's categorization of certain funds as crime proceeds and the government's definition of the criminal scheme. To prove its entitlement to restraint, the government would be required to litigate the underlying fraud allegations in the indictment to justify its position that the funds in the accounts are the proceeds of a crime. Finally, WBTW will have the opportunity to litigate the forfeiture at the conclusion of the case, when it may challenge both the forfeitability of the property, see United States v. Daugerdas, 892 F.3d 545, 558 (2d Cir. 2018), and the superiority of the government's claim to the property, see 21 U.S.C. § 853(n)(6). WBTW can then appeal from any final order.

We have considered WBTW's remaining arguments and conclude that they fail to establish jurisdiction over this appeal. Accordingly, WBTW's appeal is DISMISSED.