United States District Court, D. Connecticut
R. UNDERHILL, United States District Judge
April 19, 2013, the plaintiffs, Daniel Carpenter and Grist
Mill Capital, LLC, filed an action pursuant to Bivens v.
Six Unknown Fed. Narcotics Agents, 403 U.S. 388 (1971),
against the defendants, IRS Commissioners Douglas Schulman
and Steven Miller; Victor Song, Chief of the IRS‘
Criminal Investigation Division; Shaun Schrader, a special
agent of the Criminal Investigations Division, and Unknown
Agents 1-72, special agents of the Criminal Investigation
Division. The complaint seeks, inter alia,
compensation for alleged Fourth, Fifth, and Sixth Amendment
violations arising from the search of Grist Mill Capital for
documents related to alleged tax fraud. (doc. 1) After
significant motion practice, Schrader has now filed a renewed
motion to dismiss the Second Amended Complaint
("SAC"), on the grounds that the claims are barred
by qualified immunity and the rule articulated by the Supreme
Court in Heck v. Humphrey, 512 U.S. 477 (1994).
(doc. 72) He identifies two changed circumstances justifying
this renewed motion: first, on December 24, 2015, in a
criminal case involving a separate fraudulent scheme, U.S.
District Judge Robert N. Chatigny denied Carpenter‘s
motion to suppress the same evidence at issue here, and on
June 6, 2016, Judge Chatigny found Carpenter guilty on all 57
counts of that indictment. See United States v.
Carpenter, No. 3:13-cr-226 (RNC) (D. Conn.). Second, on
August 21, 2014, after the second motions to dismiss were
filed but before they were decided, the Second Circuit issued
Terebesi v. Torreso, 764 F.3d 217 (2d Cir. 2014),
cert. denied sub nom. Torresso v. Terebesi, 135
S.Ct. 1842 (2015), which sets out principles of Fourth
Amendment law that the parties agree may have impact in this
case. On October 5, 2016, I denied Schrader‘s motion
for conversion to a motion for summary judgment (doc. 82),
and on October 18, 2016, I held a hearing on the pending
motion to dismiss.
following reasons, I grant in part and deny in part
Schrader‘s motion to dismiss.
Standard of Review
Motion to Dismiss for Failure to State a Claim Upon Which
Relief May Be Granted
12(b)(6) motion to dismiss for failure to state a claim is
designed "merely to assess the legal feasibility of a
complaint, not to assay the weight of evidence which might be
offered in support thereof." Ryder Energy
Distribution Corp. v. Merrill Lynch Commodities, Inc.,
748 F.2d 774, 779 (2d Cir. 1984) (quoting Geisler v.
Petrocelli, 616 F.2d 636, 639 (2d Cir. 1980)).
deciding a motion to dismiss pursuant to Rule 12(b)(6), the
court must accept the material facts alleged in the complaint
as true, draw all reasonable inferences in favor of the
plaintiffs, and decide whether it is plausible that
plaintiffs have a valid claim for relief. Ashcroft v.
Iqbal, 556 U.S. 662, 678-79 (2009); Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 555-56 (2007); Leeds v.
Meltz, 85 F.3d 51, 53 (2d Cir. 1996).
Twombly, "[f]actual allegations must be enough
to raise a right to relief above the speculative level,
" and assert a cause of action with enough heft to show
entitlement to relief and "enough facts to state a claim
to relief that is plausible on its face." 550 U.S. at
555, 570; see also Iqbal, 556 U.S. at 679
("While legal conclusions can provide the framework of a
complaint, they must be supported by factual
allegations."). The plausibility standard set forth in
Twombly and Iqbal obligates the plaintiff
to "provide the grounds of his entitlement to
relief" through more than "labels and conclusions,
and a formulaic recitation of the elements of a cause of
action." Twombly, 550 U.S. at 555 (quotation
marks omitted). Plausibility at the pleading stage is
nonetheless distinct from probability, and "a
well-pleaded complaint may proceed even if it strikes a savvy
judge that actual proof of [the claims] is improbable, and .
. . recovery is very remote and unlikely." Id.
at 556 (quotation marks omitted).
following relevant facts are alleged in the Second Amended
Complaint (SAC). Carpenter is the owner of several companies,
including Grist Mill Capital, LLC ("GMC"), which
does business from 100 Grist Mill Road. SAC at ¶ 4. In
2010, Carpenter was being prosecuted in the District of
Massachusetts for a matter unrelated to the present case.
Id. at ¶ 12. In 2010, the Massachusetts case
had been tried to a verdict against Carpenter, reversed on
appeal, and Carpenter was in the process of challenging the
second verdict against him. See United States v.
Carpenter, 1:04-cr-10029 (GAO) (D. Mass.) [hereinafter,
"the Massachusetts case"].
April 16, 2010, Shaun Schrader, a Special Agent of the
Criminal Investigation Unit of the United States Internal
Revenue Service, provided an affidavit in support of an
application for a warrant to search 100 Grist Mill Road for
evidence that Carpenter was engaging in criminal tax
offenses, including conspiracy to impede the lawful function
of the IRS, 18 U.S.C. § 371, and aiding and assisting
the preparation of false income tax returns, 26 U.S.C. §
7206(2). The affidavit does not reference any
specific dangers anticipated in executing the proposed search
nor any exigent circumstances justifying a highly armed raid
on the property. SAC at ¶ 18. Carpenter alleges that
Schrader knowingly included various misstatements in the
affidavit. See Id. at ¶ 16- 17.
April 20, 2010, Schrader and 72 unknown IRS agents (the
"John Doe" defendants) executed the search warrant
at 100 Grist Mill Road in order to obtain evidence against
Daniel Carpenter and GMC. Carpenter alleges that the IRS
agents wore "black Kevlar bullet-proof vests and were
brandishing automatic weapons" during the execution of
the search, which was conducted in the same manner as a SWAT
operation. Id. at ¶¶ 8. During the search,
Carpenter and the other GMC employees were not informed of
which crime they were suspected of committing, nor were they
provided with the search warrant affidavit or any other
document indicating which crimes were at issue. Id.
the search, the government seized 322 banker boxes of
documents over the course of eighteen hours, a period in
excess of what was authorized by the warrant. Id. at
¶ 9. During the search, the agents held numerous
employees against their will for long periods of time and
interrogated them. Id. Carpenter was "placed in
custody, threatened with handcuffs, and questioned, despite
his invocation of his right to have counsel present."
Id. at ¶ 10. He was also "threatened with
arrest" when he attempted to speak to counsel or leave
the room to make a call. Id. Carpenter also alleges
that the government "ransacked" his office during
the search. Id. at ¶ 28.
alleges that Schrader had a duty to supervise the John Doe
defendants in their use of force and the manner in which they
carried out the search, and that he failed to do so.
Id. at ¶¶ 21, 24. Specifically, he alleges
that Schrader failed to supervise or instruct the agents on
what was appropriate conduct during the search, and that
Schrader was either "directly responsible" for the
intimidating tactics or "deliberately indifferent"
to the possibility that the search would be carried out in an
unconstitutional manner. Id. at ¶ 21. Carpenter
alleges that Schrader also "consciously disregarded the
substantial risk that he had authorized the custodial
interrogation" of Carpenter without reading him his
Miranda rights in violation of his Fifth and Sixth
Amendment rights to have counsel present. Id. at
alleges that Schrader‘s acts were intentional and
motivated by animus against Carpenter because of his
reputation as an "anti-government" actor and his
litigation against the government in the Massachusetts case.
Id. at ¶ 26. Accordingly, Carpenter alleges
that the manner in which the search was carried out was
deliberately intended to "harass, intimidate and
humiliate" him. Id. Carpenter further claims
that the IRS has a policy and practice of using armed agents
to enforce search warrants for tax documents, despite the
fact that the IRS manual "requires investigations to be
carried out with the least intrusive means necessary."
Id. at ¶ 22; see also Id. at ¶
25. Carpenter does not allege, however, that Schrader had any
responsibility for setting IRS policies.
date, Carpenter and his related entities have not been
indicted for the tax offenses alleged in the warrant
First Motions to Dismiss
April 3, 2014, I heard arguments and ruled on the
defendants‘ first set of motions to dismiss.
Schrader‘s first motion raised issues substantially
similar to those raised in his present motion. I granted his
motion to dismiss the complaint without prejudice to refiling
in the interest of obtaining a more detailed complaint. At
that time, I explicitly declined to reach the qualified
immunity issue. 1st Mot. to Dismiss Tr. at 47 (doc. 35).
Second Motions to Dismiss
30, 2014, the plaintiffs filed the Second Amended Complaint,
(doc. 34), and the defendants, including Schrader, thereafter
filed their second set of motions to dismiss (docs. 38 and
41). On December 4, 2014, I held a hearing on the motions to
dismiss. I granted in part and denied in part a motion to
dismiss filed by Song and Schrader, and specified that I was
taking under advisement Schrader‘s motion to dismiss on
qualified immunity grounds. (doc. 51) At that hearing,
Schrader explicitly declined to address the new factual
allegations that the search warrant affidavit was invalid,
asserting that question was better dealt with as a factual
question at summary judgment-otherwise, the Fourth, Fifth,
and Sixth Amendment arguments were substantially similar to
those raised in the instant motion.
respect to the Fourth Amendment claims arising out of the
unreasonable manner of the search, I asked the government
whether there was anything alleged in the complaint, or
likely to be put forward, indicating that the agents had
specific safety concerns that might have justified using
heavily-armed agents to conduct the search. 2d Mot. to
Dismiss Tr. at 26, 31. The government conceded that there was
nothing of that kind alleged in the complaint and suggested
it was unlikely that a stronger safety justification would be
forthcoming. Id. at 26.
The STOLI Case
December 12, 2013, after the initial complaint in this case
was filed but before the first motions to dismiss were filed,
Carpenter was indicted in the District of Connecticut for his
participation in a fraudulent scheme involving
stranger-originated life insurance. See United States v.
Carpenter, 3:13-cr-226 (RNC) (D. Conn.) [hereinafter,
"the STOLI case"]. The indictment resulted from a
criminal investigation by the Department of Labor that
included a 2011 search of the materials held by the IRS as a
result of the 2010 search described above. Accordingly, on
September 15, 2014, after the second motions to dismiss were
filed, but before they were argued,  Carpenter filed a motion to
suppress that evidence on the grounds that: (1)
Schrader‘s affidavit was materially defective because
it included numerous misstatements and deliberate omissions;
(2) the affidavit and resulting warrant were overbroad and
insufficiently particularized; and (3) the defendants failed
to provide Carpenter with the affidavit during the search.
STOLI Case, (doc. 83). The motion also alluded to the manner
in which the search was conducted as unreasonable and to
Fifth Amendment violations, but did not provide substantial
briefing on those points. Id.
December 24, 2015, Judge Chatigny denied Carpenter‘s
motion to suppress. STOLI case (doc. No 155). In relevant
part, he found that the 2010 search warrant was
"sufficiently particularized." Id. at
9-10. In making that finding, he rejected Carpenter‘s
arguments that the warrant was defective because the
supporting affidavit was not attached to it or because it
permitted a large amount of material to be seized.
Id. at 11 n.4. He found that the 2010 warrant also
was not overbroad, observing that "uncontested
statements" in Schrader‘s supporting affidavit
adequately established probable cause for the search.
Id. at 12-13. He also denied Carpenter‘s
motion for a Franks hearing on the veracity of
statements in the 2010 warrant affidavit, both because
Carpenter had failed to make a preliminary showing that a
false statement was included in the warrant and because the
uncontested statements in the warrant nevertheless
established probable cause. Id. at 15. Finally, he
held that Carpenter had failed to allege facts sufficient to
support a claim that the manner in which the search was
carried out violated his substantive due process rights.
Id. at 18-19. Judge Chatigny did not consider
whether the manner in which the search was conducted was
unreasonable and thus in violation of the Fourth Amendment.
subsequently waived his right to a jury trial, and on June 6,
2016, Judge Chatigny entered a verdict finding Carpenter
guilty on all 57 counts of the indictment in that case.
Verdict, STOLI case (doc. 212). Sentencing has been continued
until Carpenter‘s post-conviction motions are resolved.
Second Amended Complaint appears to assert four claims: (1)
Schrader violated Carpenter‘s Fourth Amendment rights
by knowingly including false statements in the warrant
affidavit; (2) Schrader violated Carpenter‘s Fourth
Amendment rights by planning and supervising an unreasonable
search of 100 Grist Mill Road; (3) Schrader violated
Carpenter‘s Fifth Amendment rights by authorizing his
custodial interrogation in a manner that created a
substantial risk of coerced self-incrimination without the
benefit of any attorney or a Miranda instruction;
and (4) Schrader violated Carpenter‘s Sixth Amendment
rights by authorizing his custodial interrogation while
Carpenter was represented by counsel in the Massachusetts
hearing, Carpenter abandoned several of those claims for the
time being. He conceded that, under the doctrine of Heck
v. Humphrey, 512 U.S. 477 (1994), the Fourth Amendment
claims based on claims of an invalid warrant are precluded by
Judge Chatigny‘s rulings in the STOLI case.
Accordingly, Schrader‘s motion to dismiss those claims
is granted without prejudice to renewal if the conviction is
invalidated. Carpenter conceded that he was withdrawing his
Fifth Amendment claim as premature. Accordingly,
Schrader‘s motion to dismiss that claim is granted
without prejudice to renewal. Carpenter also clarified at the
hearing and in his opposition brief that he does not assert a
stand-alone Sixth Amendment claim. See Pls.‘
Opp‘n Br. at 23 n.9. Accordingly, Schrader‘s
motion to dismiss that claim is denied as moot. Two
additional issues have been set on a separate briefing
schedule: (1) whether the identities of the John Doe
defendants can be subject to discovery; and (2) the viability
of any claims asserted on behalf of GMC. See (docs.
85, 88). Thus, the sole issue to resolve on this motion to
dismiss is whether qualified immunity bars Carpenter‘s
Fourth Amendment claims arising from his allegations that the
search was conducted in an unreasonable manner.
argues that the remaining Fourth Amendment claims,
which are based on allegations that Schrader was personally
responsible for conducting the search in an unreasonable
manner, are barred by the doctrine of qualified
immunity. Drawing all reasonable inferences in favor
of Carpenter, the Second Amended Complaint alleges that the
force used to effectuate the search of his property was
unreasonable and excessive because it involved 72 agents
engaged in "commando" tactics, such as wearing
bullet-proof vests and "brandishing" automatic
weapons specifically in order to intimidate Carpenter, and
that the search resulted in the needless destruction of
Carpenter‘s property. SAC at ¶¶ 8, 9, 19.
Carpenter further alleges that the excessive force was used
deliberately, at least in part because of Carpenter‘s
reputation as an "anti-government" actor.
Id. at ¶ 26. He also alleges that Schrader
unreasonably seized Carpenter during the search by subjecting
him to an extended involuntary detention for the purpose of
coercing incriminating statements. Id. at ¶ 28.
immunity shields federal and state officials from money
damages unless a plaintiff pleads facts showing (1) that the
official violated a statutory or constitutional right, and
(2) that the right was ‗clearly established‘ at
the time of the challenged conduct." Ashcroft v.
al-Kidd, 563 U.S. 731, 735 (2011) (citing Harlow v.
Fitzgerald, 457 U.S. 800, 818 (1982)). Because qualified
immunity provides "immunity from suit rather than a mere
defense to liability, " Pearson v. Callahan,
555 U.S. 223, 231 (2009) (citing Saucier v. Katz,
533 U.S. 194, 200-01 (2001)), the court should resolve
qualified immunity questions "at the earliest possible
stage of a litigation." Anderson v. Creighton,
483 U.S. 635, 646 n.6 (1987). At the motion to dismiss stage,
however, the court must accept all factual allegations in the
complaint as true and draw all reasonable inferences in favor
of the plaintiffs. See al-Kidd, 563 U.S. at 734.
Supreme Court has articulated a three-part test for
considering a claim of qualified immunity. First,
court must determine whether a constitutional violation could
exist on the facts as presented to the court.
Saucier, 533 U.S. at 201. Second, if the facts
support a claimed violation of a constitutional right, the
court must determine if the right alleged is "clearly
established." Id. "To determine whether a
right is clearly established, [courts] look to (1) whether
the right was defined with reasonable specificity; (2)
whether Supreme Court or court of appeals case law supports
the existence of the right in question, and (3) whether under
preexisting law a reasonable defendant would have understood
that his or her acts were unlawful." Scott v.
Fischer, 616 F.3d 100, 105 (2d Cir. 2010). Even if there
is no Supreme Court or Second Circuit case law directly on
point, a right may be considered "clearly
established" if decisions by the Second Circuit or other
circuit courts "clearly foreshadow a particular ruling
on the issue." Id. (internal quotation marks
and citation omitted) (collecting Second Circuit cases
relying on other circuits‘ decisions). Finally, if the
first two criteria are met, the court must determine if,
based on the facts known to the officer at the time of
events, "it would be clear to a reasonable officer that
his conduct was unlawful in the situation he
confronted." Saucier, 533 U.S. at 202.