United States District Court, E.D. California
ORDER TO SHOW CAUSE RE MOTION TO ALTER OR AMEND
JUDGMENT (ECF No. 357)
LAWRENCE J. O’NEILL UNITED STATES CHIEF DISTRICT JUDGE.
the Court for decision is Defendant Michael S. Ioane’s
(“Defendant”) Federal Rule of Civil Procedure
59(e) motion to alter or amend this Court’s March 25,
2019 Order denying Defendant’s prior motion for return
of property, brought pursuant to Federal Rule of Criminal
Procedure 41(g) (“Rule 41(g)”). See ECF
Nos. 356, 357, Defendant’s Rule 41(g) motion, filed
January 7, 2019, concerned property seized pursuant to a
search warrant from Defendant’s residence on June 8,
2006. ECF No. 348. On April 9, 2009, Defendant was indicted
for conspiracy to commit tax evasion and four counts of
presenting false and fraudulent financial instruments in the
form of “Bills of Exchange” that purported to be
securities or financial instruments. ECF No. 1, Indictment.
Defendant was convicted on all counts against him following a
jury trial. ECF No. 138. He was sentenced January 30, 2012,
with an amended Judgment and Commitment filed on February 14,
2012. ECF Nos. 181, 196.
there were no criminal proceedings pending against Defendant
as of January 2019, the Rule 41(g) motion was treated as a
civil complaint and reviewed pursuant to the Federal Rules of
Civil Procedure. See United States v. Ibrahim, 522
F.3d 1003, 1007 (9th Cir. 2008); see also Naranjo v.
United States, No. CR 00-01110-RSWL-1, 2014 WL 12591477,
at *2 (C.D. Cal. Jan. 3, 2014). In light of this treatment,
the United States moved to dismiss the motion for return of
property on statute of limitations grounds. ECF No. 352. In
its March 25, 2019 Order, this Court found that: (1) the
applicable statute of limitations is six years; (2) the
statutory period began to run from the day judgment entered
in the underlying criminal case on February 14, 2012; (3) the
statutory period therefore expired in February 2018, so
Defendant’s petition, filed in January 2019 was
untimely; and (4) Defendant’s incarceration did not
constitute a “legal disability” that should toll
the statute of limitations. ECF No. 355.
now moves for reconsideration of the March 25, 2019 Order
under Federal Rule of Civil Procedure 59(e), which permits
the filing of a motion to alter or amend a judgment within 28
days of entry of the judgment. Defendant’s motion for
reconsideration, filed April 4, 2019, ECF No. 356, fewer than
28 days after entry of the Court’s March 25, 2019
Order, was timely. Defendant later amended his motion. ECF
No. 357. The United States has not filed a response.
are four basic grounds upon which the courts have granted a
motion for reconsideration under Rule 59(e): “(1) if
such motion is necessary to correct manifest errors of law or
fact upon which the judgment rests; (2) if such motion is
necessary to present newly discovered or previously
unavailable evidence; (3) if such motion is necessary to
prevent manifest injustice; or (4) if the amendment is
justified by an intervening change in controlling law.”
Allstate Insurance Co. v. Herron, 634 F.3d 1101,
1111 (9th Cir. 2011). Reconsideration under Rule 59(e) is
“an extraordinary remedy, to be used sparingly in the
interest of finality and conservation of judicial
resources.” Kona Enterprises, Inc. v. Estate of
Bishop, 220 F.3d 877, 890 (9th Cir. 2000).
argues that the Court has misapprehended the facts and/or
applicable law in various ways. Citing Nettles v.
Grounds, 830 F.3d 922, 936 (2016), Defendant first
argues that the Court erred by failing to warn him of the
consequences of conversion of his motion to one brought under
the Federal Rules of Civil Procedure. ECF No. 357 at 3, 5.
Nettles, a case brought by a prisoner, concerned a
claim that sat close to the line between one that could be
brought as a habeas corpus action and one that was more
properly construed as a civil rights claim under 42 U.S.C.
§ 1983 (“§ 1983”). 830 F.3d 922.
Nettles filed his case as a habeas petition, but both the
district court and the Ninth Circuit concluded that
Nettles’ claims did not fall within “the core of
habeas corpus” and therefore must instead be brought
under § 1983. Id. at 933-34. The district court
had the option of recharacterizing Nettles’ claim as
one brought under § 1983, but the Ninth Circuit
cautioned that Nettles should be warned of the consequences
of the conversion and given an opportunity to withdraw his
claims instead. Id. at 935-36. Specifically, because
Nettles was a prisoner at the time of filing, his § 1983
action would be subject to the Prison Litigation Reform
Act’s (“PLRA”) three strikes rule, 28
U.S.C. § 1915(g), among other procedural restrictions.
Id. at 936. In practice, this means that a plaintiff
like Nettles should be given the opportunity to make his or
her own choice about the procedural dilemma: risk obtaining a
strike under the PLRA if one’s claim is resolved on the
merits in favor of the defendants or withdraw and lose the
opportunity for that claim to be heard. See also Castro
v. United States, 540 U.S. 375, 382-83 (2003) (similarly
holding that a district court must notify the pro se litigant
that it intends to recharacterize a pleading as a habeas
corpus petition in order to warn the litigant that this
recharacterization means that any subsequent § 2255
motion will be subject to the restrictions on “second
or successive” motions, and provide the litigant an
opportunity to withdraw the motion or to amend it so that it
contains all the § 2255 claims he believes he has).
there is no similar procedural dilemma. Under applicable
authorities, Defendants’ motion for return of property
must be construed as a civil complaint or not at all. The
Court is not aware of any caselaw requiring it to consider
Defendant’s motion as one brought under the PLRA for
purposes of the three strikes rule. Therefore, there are no
larger-scale procedural implications for Defendant, other
than having his motion adjudicated according to the
appropriate standard. Accordingly, the notice to which
Defendant asserts he was entitled would serve no particular
purpose. On this ground, Defendant’s motion is DENIED.
also argues that this Court “overlooked” an
existing civil case that addressed the seizure of his
property. First, the Court was not aware of the ostensibly
parallel civil case, Halliday, et al., v.
Spjute, et al., 1:07-cv-00620 AWI EPG
(“Halliday”), until Defendant mentioned
it in his motion for reconsideration. Defendant indicates,
without providing any legal citations, that “[u]nder
California Law the Judge issuing the Search and Seizure
Warrant is the Custodian and Fiduciary of the property
seized, ” and is therefore “the only party
authorized to release the property.” ECF No. 357 at 3.
Defendant does not explain how the civil case impacts or
otherwise undermines the reasoning of the March 25, 2019
Order, which, as noted above, is grounded upon an analysis of
the statute of limitations. However, the Court’s own
independent review of the Halliday docket reveals
that the complaints filed in Halliday squarely seek
the return of Defendant’s property as a remedy.
See, e.g., Halliday, ECF No. 1. The initial
Halliday complaint dates to April 24, 2007, more
than two years before Defendant’s criminal
conviction, arguably putting the United States on notice of
the request to return the seized property. The Court
therefore believes it may be appropriate to vacate its March
25, 2019 Order to the extent that it found Defendant’s
motion for return of property barred by the statute of
limitations. In addition, if the dismissal order is vacated,
for purposes of judicial efficiency, the Court is inclined to
transfer the motion for return of property to Anthony W.
Ishii, the judge assigned to the Halliday action, as
he will be more familiar with the underlying search.
in an abundance of caution, the Court will afford the United
States an opportunity to address these issues. Accordingly,
on or before October 25, 2019, the United States may file a
response addressing the impact of Halliday on the
statute of limitations applicable to the present request for
return of property. Alternatively, in light of the fact that
the United States expressed willingness to return all
non-contraband items to Defendant, ECF No. 352 at 3, the
Court encourages the parties to attempt to resolve their
differences on the seized materials without judicial
 Glenn Halliday was a co-plaintiff of
Defendant in the Halliday lawsuit.
 In Halliday, Defendant was
(and others still are) challenging various aspects of the
lawfulness of the underlying search. It appears that most (if
not all) of the claims in the Halliday lawsuit have
been resolved in favor of the Halliday defendants.
But, the procedural status of Halliday does not