Case 2:18-cr-00422-SPL Document 447 Filed 01/24/19 Page 1 of 4
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF ARIZONA
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`No. CR-18-00422-PHX-SPL
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`ORDER
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`Defendants.
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`United States of America,
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`Plaintiff,
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`vs.
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`Michael Lacey, et al.,
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`Before the Court is Defendant Michael Lacey’s (“Lacey”) Motion for Release of
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`Funds Unrelated to Backpage and Request for Expedited Relief (Doc. 385) (the “Motion
`for Release of Funds”) and Lacey’s Motion to Strike the Government’s Untimely
`Opposition to His Motion for Release of Funds Unrelated to Backpage and Request for
`Expedited Relief (Doc. 415) (the “Motion to Strike”). The Motion for Release of Funds
`was fully briefed on December 11, 2018. (Docs. 412, 424) The Motion to Strike was fully
`briefed on December 21, 2018. (Docs. 423, 426) The Court’s ruling is as follows.
`I.
`Background
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`On March 28, 2018, a federal grand jury returned a ninety-three count indictment
`against several Defendants, including Lacey, alleging that the Defendants engaged in
`various crimes related to the operation of the website Backpage.com, including conspiracy,
`facilitating prostitution, and money laundering. (Doc. 3) The indictment also includes
`forfeiture allegations.1 On April 26, 2018, the U.S. District Court for the Central District
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`1 On July 25, 2018, the grand jury returned a 100-count superseding indictment
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`Case 2:18-cr-00422-SPL Document 447 Filed 01/24/19 Page 2 of 4
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`of California issued seizure warrants for certain of Lacey’s accounts with the Republic
`Bank of Arizona ending in x2485, x1897, and x3126. (Doc. 412 at 2; Doc. 385 at 1)
`On November 16, 2018, Lacey filed the Motion for Release of Funds seeking an
`order from the Court providing equitable relief from the seizure warrants issued by the
`Central District of California. (Doc. 385) On December 3, 2018, Lacey filed a Notice of
`Government’s Non-Opposition to the Motion for Release of Funds. (Doc. 403) On
`December 11, 2018, the Government filed its response to the Motion for Release of Funds
`(Doc. 412), and Lacey filed the Motion to Strike, citing the response as untimely. (Doc.
`415)
`II. Motion to Strike
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`Lacey filed the Motion to Strike seeking to strike the Government’s response to his
`Motion for Release of Funds because the response was filed more than fourteen days after
`service of the Motion for Release of Funds, as required by Local Rule of Civil Procedure
`7.2(c). LRCrim 12.1; (Doc. 415 at 5). In response, the Government argues that its response
`was timely because the Motion for Release of Funds is essentially a motion pursuant to
`Federal Rule of Criminal Procedure 41(g), which would allow the Government 60 days to
`respond. (Doc. 423 at 2)
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`The decision to grant or deny a motion to strike is within the Court’s discretion.
`Sunburst Minerals, LLC v. Emerald Copper Corp., 300 F. Supp. 3d 1056, 1059 (D. Ariz.
`2018); LRCiv 7.2(i) (stating that the Court may, but is not required to, dispose of the motion
`summarily). A court may deny a motion to strike for untimely filing upon a finding of
`excusable neglect. Stewart v. Unknown Bezy, 473 F. App’x 752, 753 (9th Cir. 2012). To
`determine whether a party’s failure to meet a deadline constitutes excusable neglect, courts
`must apply a four-factor equitable test, examining: (1) the danger of prejudice to the
`opposing party; (2) the length of the delay and its potential impact on the proceedings; (3)
`the reason for the delay; and (4) whether the movant acted in good faith. Ahanchian v.
`Xenon Pictures, Inc., 624 F.3d 1253, 1261 (9th Cir. 2010).
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`against the Defendants. (Doc. 230)
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`Case 2:18-cr-00422-SPL Document 447 Filed 01/24/19 Page 3 of 4
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`At this time, the Court declines to exercise its discretion to strike the Government’s
`response. First, the Court does not find that the Defendant suffered any prejudice from the
`untimely filing, and the Defendant did not identify any prejudice in his pleadings. Second,
`the delay had no impact on the Court’s timing in considering the Motion for Release of
`Funds or any potential impact on the proceedings in this case. The Court finds that the
`Government’s reason for the untimely filing was plausible, as the Motion for Release of
`Funds could easily be identified as a motion pursuant to FRCRP 41(g), despite the fact that
`the Court declines to address that issue at this time. Finally, the Court does not find any
`evidence that either party acted in bad faith. Accordingly, the Court finds that the
`Government has demonstrated excusable neglect for its untimely filing, and the Motion to
`Strike is denied. The Court cautions the parties that this exercise of discretion will not
`excuse untimely filings in the future.
`III. Motion for Release of Funds
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`Lacey also seeks an order from the Court releasing the funds held in three bank
`accounts identified as “Republic Bank accounts ending in 2485, 1897, and 3126.” (Doc.
`385 at 1) The seizure warrants freezing these accounts were issued by the Central District
`of California. (Doc. 424 at 6) At a hearing held on November 16, 2018, the Court declined
`to disrupt the seizure warrants issued by the Central District of California when similar
`challenges were brought by other Defendants (Docs. 360, 365, 376), and the Court found
`that the Defendants had a sufficient legal remedy for any challenges to the seizure warrants
`issued by the Central District of California in that district. (Doc. 401 at 56, 57–58, 59)
`Lacey argues that the Court’s prior Order is distinguishable from the present Motion
`for Release of Funds because he is not challenging the issuance, authorization or
`enforcement of the seizure warrants. (Doc. 424 at 6) Instead, Lacey argues that the Motion
`for Release of Funds is seeking equitable relief from the seizure warrants in the form of
`releasing the funds that are being restricted by the warrants. (Doc. 424 at 6) However,
`Lacey has not provided the Court with any precedent or persuasive argument for why he
`cannot seek the requested equitable relief in the Central District of California. Quite
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`Case 2:18-cr-00422-SPL Document 447 Filed 01/24/19 Page 4 of 4
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`strangely, Lacey admits that “an Application and Motion” challenging the seizure warrants
`at issue are presently being litigated before the Central District of California. (Doc. 424 at
`8–9, stating “[w]hile the parties continue to litigate the Application and Motion in the
`Central District of California, the government’s handling of that litigation demonstrates
`that this Motion should not face the same fate . . . .”) Therefore, as discussed in the Court’s
`previous Order, the Court finds that any legal or equitable relief from the warrants issued
`by the Central District of California is properly sought in that district.2 The Court declines
`to exercise its jurisdiction to provide equitable relief from seizure warrants issued by
`another court where the Defendant is able to seek relief from the rendering court.3
`Accordingly,
`IT IS ORDERED that Defendant’s Motion for Release of Funds Unrelated to
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`Backpage and Request for Expedited Relief (Doc. 385) is denied; and
`IT IS FURTHER ORDERED that Defendant’s Motion to Strike the Government’s
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`Untimely Opposition to His Motion for Release of Funds Unrelated to Backpage and
`Request for Expedited Relief (Doc. 415) is denied.
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`Dated this 24th day of January, 2019.
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`Honorable Steven P. Logan
`United States District Judge
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`2It is well settled that a court should rarely interfere with the order of another court, as any
`such interference usurps the power of the rendering court. Although courts have held that justice
`may occasionally demand this type of interference, the identification of those rare situations is
`committed to the sound discretion of the district court. Ord v. United States, 8 F. App’x 852 (9th
`Cir. 2001); Treadaway v. Acad. of Motion Picture Arts & Scis., 783 F.2d 1418 (9th Cir. 1986).
`3 The Ninth Circuit Court of Appeals has held that considerations of comity and orderly
`administration of justice demand that the non-rendering court should decline jurisdiction of an
`action and remand parties for their relief to the rendering court. Delson Grp., Inc. v. GSM Ass’n,
`570 F. App’x 690 (9th Cir. 2014).
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