RoadsideImports LLC et al v. USA

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Nina Y. Wang
Civil Action No. 25-cv-00058-NYW-SBP
ROADSIDEIMPORTS LLC, and
JOHAN LUMSDEN,
Plaintiffs,
v.
UNITED STATES,
Defendant.
______________________________________________________________________
MEMORANDUM OPINION AND ORDER
______________________________________________________________________
This matter is before the Court on Defendant’s Motion to Dismiss, [Doc. 12], and
Defendant’s Motion for Partial Summary Judgment on Claims 4–8 (“Motion for Partial
Summary Judgment”), [Doc. 22]. Plaintiffs Johan Lumsden (“Mr. Lumsden”) and
RoadsideImports, LLC (“Roadside”) (together, “Plaintiffs”) have responded to both
Motions. [Doc. 16; Doc. 26]. Defendant United States (“Defendant” or “the Government”)
has replied. [Doc. 19; Doc. 31]. Upon review, the Court concludes that oral argument
would not materially assist in the disposition of the Motions. For the reasons set forth
below, the Motion to Dismiss is GRANTED in part and DENIED in part as moot, and
the Motion for Partial Summary Judgment is DENIED as moot.
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BACKGROUND1
Plaintiff Johan Lumsden is an expert in the manufacture, sale, and repair of
switchblades. [Doc. 1 at ¶ 9]. Roadside is an online switchblade business that Mr.
Lumsden operated out of his Colorado home in 2020. [Id. at ¶¶ 1–2, 10–11]. Plaintiffs
estimate that the market value of their switchblade inventory was approximately $5
million. [Id. at ¶ 12].
In October 2020, unnamed federal agents executed a no-knock raid on Mr.
Lumsden’s property. [Id. at ¶ 15]. The agents used flash grenades, injuring Mr. Lumsden
and damaging his home. [Id. at ¶ 16]. Mr. Lumsden was handcuffed and placed in a
patrol car long enough to cause nerve damage. [Id. at ¶ 17]. Mr. Lumsden’s dog was
tasered, damaging the dog’s teeth. [Id. at ¶ 25]. The agents confiscated Plaintiffs’
inventory and hard drives, which contain historical data essential to the resale value of
some switchblades. [Id. at ¶¶ 18, 23]. Two and a half years later, the Government
returned Plaintiffs’ inventory, but the inventory was not “in substantially the same
condition” as when it was seized. [Id. at ¶¶ 19, 41]. At that time, the Government told Mr.
Lumsden that it “did not intend to pursue the matter further.” [Id. at ¶ 19]. The
Government has not returned the hard drives. [Id. at ¶ 23]. Plaintiffs allege that the
Government’s conduct has “destroy[ed] Plaintiffs’ business” in addition to other damages.
[Id. at ¶¶ 22, 26–27].
In January 2024, Plaintiffs submitted an administrative tort claim, also called a SF-
1 The Court provides the following discussion as background only, although it notes that
Plaintiff’s factual allegations are generally undisputed. See [Doc. 22 at 2–3]. In resolving
the jurisdictional arguments in the Motion to Dismiss, the Court credits Plaintiff’s factual
allegations only insofar as they are undisputed and not contradicted by documents in the
record. See infra at 5.
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95, to several federal agencies. [Doc. 12-1]; see also [Doc. 12 at 2 n.1 (discussing filing
date)]. The Department of Justice informed Plaintiffs that it had forwarded their claim to
the Internal Revenue Service (“IRS”) and Department of Homeland Security (“DHS”).
[Doc. 12-2 at 2]. The IRS denied Plaintiffs’ claim in November 2024, [Doc. 22-3], and this
suit followed in January 2025, [Doc. 1].
Plaintiffs bring eight claims: (1) conversion, (2) civil theft, (3) replevin,
(4) negligence, (5) trespass, (6) assault and battery, (7) false imprisonment, and
(8) invasion of privacy. [Doc. 1 at ¶¶ 28–63]. They seek return of the hard drives and
monetary damages, among other things. [Id. at 8]. The Government moves to dismiss
all eight claims. [Doc. 12]. The Government contends that Plaintiffs’ claims fall outside
the waiver of sovereign immunity in the Federal Tort Claims Act (“FTCA”) and, in any
case, fail to state claims for relief. See [id.]. In its Reply in support of the Motion to
Dismiss, the Government asked the Court to reserve a ruling on sovereign immunity as
to Claims 4–8 until the Court issued a summary-judgment ruling on the Government’s
affirmative defense that Plaintiffs failed to timely exhaust their administrative remedies for
those claims. [Doc. 19 at 1–2, 6–7]. The Government then presented that defense in the
Motion for Partial Summary Judgment. [Doc. 22].
LEGAL STANDARDS
I. Rule 56
Under Rule 56 of the Federal Rules of Civil Procedure, summary judgment is
appropriate “if the movant shows that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “A
dispute is genuine if there is sufficient evidence so that a rational trier of fact could resolve
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the issue either way. A fact is material if under the substantive law it is essential to the
proper disposition of the claim.” Crowe v. ADT Sec. Servs., Inc., 649 F.3d 1189, 1194
(10th Cir. 2011) (citation and quotations omitted). Where, as here, “the moving party has
the burden of proof—the plaintiff on a claim for relief or the defendant on an affirmative
defense—his showing must be sufficient for the court to hold that no reasonable trier of
fact could find other than for the moving party.” Leone v. Owsley, 810 F.3d 1149, 1153
(10th Cir. 2015) (cleaned up). The Court views the record in the light most favorable to
the nonmovant and cannot weigh the evidence or determine the credibility of witnesses.
See Fogarty v. Gallegos, 523 F.3d 1147, 1165 (10th Cir. 2008); Banner Bank v. First Am.
Title Ins. Co., 916 F.3d 1323, 1326 (10th Cir. 2019).
II. Rule 12(b)(1)
Rule 12(b)(1) provides that a complaint may be dismissed for “lack of subject-
matter jurisdiction.” Fed. R. Civ. P. 12(b)(1). Federal courts are courts of limited
jurisdiction, Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994), and
the burden of establishing federal jurisdiction falls on the party invoking it, Merida Delgado
v. Gonzales, 428 F.3d 916, 919 (10th Cir. 2005).
A Rule 12(b)(1) motion may be classified as a facial attack or a factual attack on
subject matter jurisdiction. Each type of attack implicates a different analytical framework.
The Tenth Circuit has explained that:
Motions to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1)
may take one of two forms. First, a party may make a facial challenge to
the plaintiff’s allegations concerning subject matter jurisdiction, thereby
questioning the sufficiency of the complaint. In addressing a facial attack,
the district court must accept the allegations in the complaint as true.
Second, a party may go beyond allegations contained in the complaint and
challenge the facts upon which subject matter jurisdiction depends. In
addressing a factual attack, the court does not presume the truthfulness of
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the complaint’s factual allegations, but has wide discretion to allow
affidavits, other documents, and a limited evidentiary hearing to resolve
disputed jurisdictional facts under Rule 12(b)(1).
United States v. Rodriguez-Aguirre, 264 F.3d 1195, 1203 (10th Cir. 2001) (cleaned up).
When “the jurisdictional question is intertwined with the merits of the case, the
[motion to dismiss] should be construed as a motion for summary judgment, not a Rule
12(b)(1) motion to dismiss for lack of subject matter jurisdiction.” Garcia v. U.S. Air Force,
533 F.3d 1170, 1176 (10th Cir. 2008). “[I]f subject matter jurisdiction is dependent on the
same statute which provides the substantive claim in the case,” courts consider the
jurisdictional question and merits of the case to be intertwined. Pringle v. United States,
208 F.3d 1220, 1222 (10th Cir. 2000) (quotation omitted). But if the “pertinent
jurisdictional facts are undisputed,” conversion to a summary judgment standard is
unnecessary. Myles v. United States, 52 F. App’x 108, 109 (10th Cir. 2002); Lopez v.
United States, 376 F.3d 1055, 1061 (10th Cir. 2004) (declining conversion where facts in
dispute were “immaterial to the applicability of” an exception to a waiver of sovereign
immunity).
Here, the Government presents its Motion to Dismiss as a factual attack on
jurisdiction. [Doc. 12 at 4–5]. The Government has submitted documents outside the
pleadings for the Court’s consideration. [Doc. 12-1; Doc. 12-2; Doc. 12-3]. Plaintiffs do
not address this point. See [Doc. 16]. As explained below, the salient jurisdictional
facts are uncontroverted, and the Court finds that conversion to a summary
judgment standard is unnecessary. The Court thus resolves the Motion to Dismiss
as a factual attack on subject matter jurisdiction.
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III. Sovereign Immunity and the FTCA
The United States is generally immune from suit pursuant to the doctrine of
sovereign immunity, which precludes federal jurisdiction. See United States v. Mitchell,
463 U.S. 206, 212 (1983) (“It is axiomatic that the United States may not be sued without
its consent and that the existence of consent is a prerequisite for jurisdiction.”). But
“[t]hrough 28 U.S.C. § 1346(b)(1), the FTCA waives sovereign immunity for certain state
law tort claims against the United States.” Garling v. EPA, 849 F.3d 1289, 1294 (10th
Cir. 2017). The FTCA provides that the United States may be sued for damages for
injuries
caused by the negligent or wrongful act or omission of any employee of the
Government while acting within the scope of his office or employment,
under circumstances where the United States, if a private person, would be
liable to the claimant in accordance with the law of the place where the act
or omission occurred.
28 U.S.C. § 1346(b)(1). In other words, the FTCA waives sovereign immunity “with
respect to certain injuries caused by government employees acting within the scope of
their employment.” Tippett v. United States, 108 F.3d 1194, 1196 (10th Cir. 1997). But
the FTCA’s waiver of immunity is subject to exceptions. “When an exception applies,
sovereign immunity remains, and federal courts lack jurisdiction.” Garling, 849 F.3d at
1294.
The Tenth Circuit has identified several “guiding principles” in determining whether
an FTCA exception applies to a plaintiff's claims. Ohlsen v. United States, 998 F.3d 1143,
1154 (10th Cir. 2021). First, “a ‘waiver of sovereign immunity must be strictly construed,
in terms of its scope, in favor of the sovereign.’” Id. (quoting Sossamon v. Texas, 563
U.S. 277, 292 (2011)). Second, exceptions to the FTCA must be narrowly construed. Id.
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(citation omitted). Finally, consistent with the burden of proof borne by parties asserting
subject matter jurisdiction, “the party suing the government bears the burden to prove a
waiver of sovereign immunity.” Id. (citation omitted); Miller v. United States, 710 F.2d
656, 662 (10th Cir. 1983).
ANALYSIS
I. Motion for Partial Summary Judgment
Because the briefing on the Motion for Partial Summary Judgment obviates the
need to resolve certain issues in the Motion to Dismiss, the Court begins its analysis
there. The Government seeks summary judgment on Claims 4–8 in the Complaint—
Plaintiffs’ claims for negligence, trespass, assault and battery, false imprisonment, and
invasion of privacy. [Doc. 22]. The Government argues that Plaintiffs failed to comply
with the FTCA’s statute of limitations, which requires a plaintiff to present written notice of
a claim “in writing to the appropriate Federal agency within two years after such claim
accrues.” 28 U.S.C. § 2401(b); see [Doc. 22 at 5–6]. Crediting Plaintiffs’ factual
allegations, the Government contends that Claims 4–8 accrued on October 1, 2020, the
day of the raid. [Id. at 6]; see also [id. at ¶¶ 4, 9–14]. But because Plaintiffs did not submit
their administrative tort claim until January 2024, more than three years later, the
Government asserts that these claims are time-barred. [Id. at 6].
Plaintiffs do not dispute this argument. Instead, they filed a “Conditional
Confession of Summary Judgment on Claims 4–8.” [Doc. 26]. “Plaintiffs agree to
summary judgment on Plaintiffs’ claims 4, 5, 6, 7, and 8” but note that the Government
has not disclosed the search warrant or supporting affidavit that led to the raid on Plaintiffs’
property. [Id. at 1]. Plaintiffs purport to “reserve the right to move for restoration of the
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claims upon receipt of the affidavit.” [Id.]. The Government replies that the warrant,
affidavit, or other information would not affect the timeliness of Claims 4–8. [Doc. 31 at
2].
Although the Parties agree that Claims 4–8 are untimely, § 2401(b)’s two-year time
limit for giving notice to a federal agency is not jurisdictional. See United States v. Wong,
575 U.S. 402, 410 (2015). Thus, the Court finds it inappropriate to enter summary
judgment because it has not first resolved its subject matter jurisdiction as to Claims 4–
8. See [Doc. 12 at 5–7; Doc. 16 at ¶¶ 3–4]; Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 95 (1998) (“The requirement that jurisdiction be established as a threshold matter
. . . is inflexible and without exception.” (quotation omitted)); Valenzuela v. Silversmith,
699 F.3d 1199, 1204–05 (10th Cir. 2012) (explaining that federal courts cannot “assume
they have subject matter jurisdiction for the purpose of deciding claims on the merits”).
Instead, the Court construes Plaintiffs’ “conditional confession” of Claims 4–8 as a motion
for voluntary dismissal under Rule 41(a)(2) and respectfully GRANTS such motion. See
Fed. R. Civ. P. 41(a)(2). Claims 4–8 are DISMISSED without prejudice. Defendant’s
Motion for Partial Summary Judgment is respectfully DENIED as moot.
II. Motion to Dismiss
The Government’s Motion to Dismiss seeks dismissal of all eight of Plaintiff’s
claims. See [Doc. 12]. Having permitted voluntary dismissal of Claims 4–8, the Court
DENIES as moot the Motion to Dismiss insofar as it challenges those claims. The Court
limits its analysis to Claims 1–3, which are claims for conversion, civil theft, and replevin.
These claims spring from the Government’s seizure of Plaintiffs’ inventory and hard drives
and its continued failure to return the hard drives. See [Doc. 1 at ¶¶ 28–43]. In the Motion
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to Dismiss, the Government argues, among other things, that these claims are barred by
the FTCA’s “detention of goods” exception. [Doc. 12 at 7–8]; 28 U.S.C. § 2680(c).
Plaintiffs respond that Claims 1–3 fall outside this exception and that, even if the exception
applies, the claims are authorized by the Civil Forfeiture Reform Act of 2000 (“CAFRA”),
28 U.S.C. § 2680(c)(1)–(4). [Doc. 16 at ¶¶ 5–11]. Alternatively, Plaintiffs request
jurisdictional discovery. [Id. at ¶¶ 17–20]. The Court addresses each issue in turn.
A. Section 2680(c): the “Detention” Exception
This exception bars “[a]ny claim arising in respect of . . . the detention of any goods,
merchandise, or other property by any officer of customs or excise or any other law
enforcement office.” 28 U.S.C. § 2680(c). The Supreme Court has interpreted this
exemption to cover claims based on the negligent handling, storage, or loss of property
detained by any federal law enforcement officer. See Kosak v. United States, 465 U.S.
848 (1984); Ali v. Fed. Bureau of Prisons, 552 U.S. 214 (2008). In Kosak, the Court held
that the exception applied to claims against customs officials who seized a plaintiff’s
artwork and allegedly negligently damaged the property while it was in their custody. 465
U.S. at 849–50, 854. In Ali, the Court held that prison officers who allegedly lost a
prisoner’s property were “other law enforcement officer[s]” within the meaning of the
exception. 552 U.S. at 218–21. Relying on these precedents, the Government contends
that Plaintiffs’ Claims 1–3 “fall[] squarely within the detention of goods exception.” [Doc.
19 at 5]; see also [Doc. 12 at 7 (analyzing Kosak)].
The Court is respectfully unpersuaded by Plaintiffs’ various counterarguments.
See [Doc. 16 at ¶¶ 5–6]. First, Plaintiffs suggest that the detention exception applies only
to importing goods. [Id.]. That position is foreclosed by Ali, which held that § 2680(c) is
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“not limited to officers acting in a customs or excise capacity.” 552 U.S. at 221. Second,
Plaintiffs argue that a “detention” is “temporary” and therefore distinct from a “seizure.”
[Doc. 16 at ¶ 5]. But Ali applied the exception to a permanent loss of property, 552 U.S.
at 221, and Tenth Circuit has held that a “seizure” qualifies as a “detention of goods,” see,
e.g., United States v. 2,116 Boxes of Boned Beef, Weighing Approximately 154,121
Pounds, 726 F.2d 1481, 1491 (10th Cir. 1984). In any case, the Court perceives nothing
in the plain meaning of the word “detention” that precludes a permanent detention.
Detention, Black’s Law Dictionary (12th ed. 2024) (defining detention to include “[c]ustody
of property” or “withholding of another’s personal property”); Detention, Merriam-Webster,
https://www.merriam-webster.com/dictionary/detain (last visited March 25, 2026) (“to hold
or keep in or as if in custody”). And the Sixth Circuit case relied on by Plaintiffs only
distinguished “detention” from “seizure” in reaching its conclusion that § 2680(c) applies
only to customs officers—a holding which has since been abrogated by Ali. See Kurinsky
v. United States, 33 F.3d 594, 597–98 (6th Cir. 1994), abrogated by Ali, 552 U.S. 214.
Third, Plaintiffs propose that the detention exception only applies to officers who
“destroy[] property in the process of detaining it,” as opposed to destruction that occurs
“after [the property] ha[s] been secured.” [Doc. 16 at ¶ 6 (emphasis omitted)]. This is the
exact interpretation rejected in Kosak, where the petitioners argued that § 2680(c) covers
“only claims for damage caused by the detention itself and not for the negligent
destruction of property while it is in the possession of the [Government].” 465 U.S. at 852
(cleaned up). The Supreme Court disagreed, explaining that § 2680(c) applies to “a claim
resulting from negligent handling or storage of detained property.” Id. at 854. “Following
Kosak, ‘[t]he courts have interpreted section 2680(c) to bar claims premised on essentially
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any injury to property sustained during its detention.’” Walkner v. United States, 43 F.
App’x 340, 342 (10th Cir. 2002) (quoting United States v. Bein, 214 F.3d 408, 415 (3d Cir.
2000)) (describing Kosak as applying to “the negligent destruction of property”). In short,
Plaintiffs’ claims that federal law enforcement agents confiscated, detained, and
destroyed (or failed to return) their property arise from a “detention of goods” and thus fall
within § 2680(c).
B. CAFRA
Even if Claims 1–3 arise from a “detention of goods,” Plaintiffs argue, sovereign
immunity for these claims is still waived through CAFRA. [Doc. 16 at ¶ 7]; see 28 U.S.C.
§ 2680(c)(1)–(4). If § 2680(c) is an exception to the FTCA’s waiver of sovereign immunity,
then CAFRA is “the exception to the exception.” Ali, 552 U.S. at 239 (Kennedy, J.,
dissenting). CAFRA re-waives sovereign immunity for otherwise-excepted claims where,
inter alia, the claimant’s property was “seized for the purpose of forfeiture under any
provision of Federal law providing for the forfeiture of property other than as a sentence
imposed upon conviction of a criminal offense.” § 2680(c)(1); see also § 2680(c)(2)–(4)
(imposing other requirements for CAFRA to apply).
As an initial matter, Plaintiffs provide no evidence or factual allegations that the
Government confiscated their property for the purpose of forfeiture. See [Doc. 16].
Indeed, there is no such evidence in the record. The Government never pursued further
proceedings, forfeiture or otherwise, against Plaintiffs. [Doc. 1 at ¶¶ 19–20]. And the
Government has submitted the Declaration of IRS Supervisory Special Agent Melinda
Wilgus, who avers that Plaintiffs’ property “was seized as evidence as part of” an IRS
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investigation into “Plaintiffs’ potential criminal tax fraud.” [Doc. 12-3 at ¶¶ 2–3]. Whether
the IRS was contemplating forfeiture as opposed to other sanctions is entirely speculative.
Implicitly conceding the lack of evidence for forfeiture, Plaintiffs argue that
“[f]orfeiture is a synonym for a fine.” [Doc. 16 at ¶ 7 (citing Austin v. United States, 509
U.S. 602, 614 n.7 (1993) (discussing Founding-era sources equating “forfeiture” and
“fine”))]. But whether 18th century common law sources understood “forfeiture” to also
mean “fine” is inapposite to the applicability of CAFRA. Section 2680(c)(1) does not
mention “forfeiture” in a generic sense; it specifically refers to “forfeiture under any
provision of Federal law providing for the forfeiture of property.” Plaintiffs do not explain
what “fine” they are referencing, much less establish that such a fine would be covered
by a federal forfeiture statute. This alone means that Plaintiffs fail to carry their burden to
establish a waiver of sovereign immunity. See Ohlsen, 998 F.3d at 1154.
Even if Plaintiffs could demonstrate that the federal agents seized their property
for the purpose of forfeiture, they fail to establish that the seizure occurred “solely for
purposes of forfeiture.” Shigemura v. United States, 504 F. App’x 678, 680 (10th Cir.
2012). When federal agents act with a “dual purpose,” such as “seizing for investigation
and for forfeiture,” CAFRA does not apply. See id. (emphasis added). Shigemura
explained that the sole-purpose rule advances the FTCA’s intent not to “impair ‘law
enforcement officers’ effectiveness in carrying out the important purposes underlying the
seizure and redirect their attention from the possibility of danger in executing the search
warrant to the possibility of civil damages.’” Id. (quoting Foster v. United States, 522 F.3d
1071, 1078 (9th Cir. 2008)). Although Shigemura is an unpublished decision, it adopted
the sole-purpose rule from the Ninth Circuit’s decision in Foster. See id. Several other
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circuits have done the same. See, e.g., Myers v. Mayorkas, 67 F.4th 229, 235 (4th Cir.
2023); Smoke Shop, LLC v. United States, 761 F.3d 779, 784 (7th Cir. 2014); Bowens v.
U.S. Dep’t of Just., 415 F. App’x 340, 343 (3d Cir. 2011). Plaintiffs cite no authority
rejecting the sole-purpose rule—the only case they cite, Diaz v. United States, 517 F.3d
608, 613 (2d Cir. 2008), did not consider the sole-purpose rule or § 2680(c)(1) because
it was “immediately clear” that the plaintiff could not satisfy one of CAFRA’s other
requirements. 517 F.3d at 613–14; [Doc. 16 at ¶ 9]. The Court respectfully finds
Shigemura, Foster, and other decisions adopting the sole-purpose rule to be persuasive
and consistent with the rule that waivers of sovereign immunity must be strictly construed
in favor of the sovereign. See Ohlsen, 998 F.3d at 1154.
Plaintiffs also ask the Court not to apply the sole-purpose rule because they claim
the Government’s investigative purpose in seizing Plaintiffs’ property was not “bona fide,”
and that the Government’s confiscation of their property was “[in]consistent with a criminal
prosecution to recover back taxes.” [Doc. 16 at ¶¶ 8, 10]. These arguments are
conclusory and unsupported by any factual allegations. Plaintiffs’ theory appears to be
that the Government’s investigation into them (or at least the raid) was a mere pretext for
forfeiture, but they never explain how the Government could obtain forfeiture based on
“criminal tax fraud,” [Doc. 12-3 at ¶ 3], without first conducting an investigation. The Court
appreciates that no charges were brought and that Plaintiffs dispute the basis for the
investigation and raid. But fundamentally, Plaintiffs fail to demonstrate that the seizure of
a business’s records and inventory is inconsistent with an investigation of potential tax
crimes. The record before the Court uniformly reflects that Plaintiffs’ property was
confiscated at least partly for purposes of a criminal investigation, and at least some of
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the seized items would become “evidence” if the Government elected to pursue charges.
See [id. at ¶ 2]. Because Plaintiffs have failed to demonstrate that forfeiture was the sole
purpose of the Government’s actions, CAFRA does not apply, and Plaintiffs’ claims are
barred. See Shigemura, 504 F. App’x at 680.
C. Jurisdictional Discovery
In the alternative, Plaintiffs request jurisdictional discovery. [Doc. 16 at ¶¶ 17–20].
As Defendants point out, this request violates this District’s Local Rules, which do not
permit an affirmative motion to be included in a response to another motion. [Doc. 19 at
7]; D.C.COLO.LCivR 7.1(d) (“A motion shall not be included in a response or reply to the
original motion. A motion shall be filed as a separate document.”). Even if this argument
were properly raised, Plaintiffs fail to demonstrate that discovery is warranted.
District courts possess “broad discretion” to determine whether to permit
jurisdictional discovery. Dental Dynamics, LLC v. Jolly Dental Grp., LLC, 946 F.3d 1223,
1233 (10th Cir. 2020). Denying jurisdictional discovery is an abuse of discretion, however,
if it would prejudice a party. Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino &
Resort, 629 F.3d 1173, 1189 (10th Cir. 2010). “Prejudice exists where pertinent facts
bearing on the question of jurisdiction are controverted or where a more satisfactory
showing of the facts is necessary.” Dental Dynamics, 946 F.3d at 1233 (cleaned up). The
party seeking discovery bears the burden of establishing prejudice. Id.
Based on the record before it, the Court concludes that Plaintiffs have not carried
their burden. First, they seek discovery regarding “the basis for the search warrant, the
basis for alleging back due taxes, the calculations of the amounts allegedly due, the
participants in the raid, the individuals who transported, housed, and inspected Plaintiffs’
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inventory, all reports concerning the raid, and all reports concerning post-raid detention
and collection.” [Doc. 16 at ¶ 18]. Plaintiffs vaguely suggest that discovery on these facts
could somehow undermine the Government’s assertion of the FTCA’s detention
exception. [Id.]. But they do not explain what specific jurisdictional facts are controverted
or how these discovery topics would tip the scales regarding the application of the
exception. Rather, it appears that discovery would only confirm what the record already
shows: that the IRS (with possible assistance from DHS) was investigating Plaintiffs for
criminal tax fraud, that the IRS obtained a warrant and confiscated Plaintiffs’ property
pursuant to that investigation, and that Plaintiffs’ Claims 1–3 arise from the Government’s
detention of their property. Plaintiffs’ speculation that their requested discovery may be
“relevant to sovereign immunity” is insufficient to establish prejudice. See Breakthrough
Mgmt., 629 F.3d at 1190 (noting that district court may reject request for jurisdictional
discovery that is “based on little more than a hunch that [discovery] might yield
jurisdictionally relevant facts” (quoting Boschetto v. Hansing, 539 F.3d 1011, 1020 (9th
Cir. 2008)).
Plaintiffs next seek discovery to explore other potential claims that they may wish
to bring in the future. [Doc. 16 at ¶¶ 19–20]. But that would amount to a “fishing
expedition” with little, if any, bearing on the Court’s assessment of its jurisdiction over
Plaintiffs’ current claims. Breakthrough Mgmt., 629 F.3d at 1190 (quotation omitted). The
case law is clear that judges are trusted to prevent discovery from becoming “‘fishing
expeditions’ or an undirected rummaging . . . for evidence of some unknown wrongdoing.”
See Cuomo v. Clearing House Ass’n, L.L.C., 557 U.S. 519, 531 (2009). Plaintiffs fail to
justify their request for jurisdictional discovery on this basis.
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Accordingly, Defendant’s Motion to Dismiss is respectfully GRANTED as to Claims
1–3, and those claims are DISMISSED without prejudice. Brereton v. Bountiful City
Corp., 434 F.3d 1213, 1219 (10th Cir. 2006) (“[A] jurisdictional defect calls for a dismissal
without prejudice.”). The Court need not reach the Parties’ remaining arguments
regarding other FTCA exceptions or whether Plaintiffs have stated a plausible claim for
relief.
CONCLUSION
For the reasons set forth above, IT IS ORDERED that:
(1) Plaintiff’s Conditional Confession of Summary Judgment on Claims 4–8
[Doc. 26] is CONSTRUED as a motion for voluntary dismissal pursuant to
Fed. R. Civ. P. 41(a)(2); such motion is GRANTED; and Claims 4–8 are
DISMISSED without prejudice;
(2) Defendant’s Motion for Partial Summary Judgment on Claims 4–8 [Doc. 22]
is DENIED as moot;
(3) Defendant’s Motion to Dismiss [Doc. 12] is GRANTED as to Claims 1–3 and
DENIED as moot as to Claims 4–8;
(4) Claims 1–3 are DISMISSED without prejudice for lack of subject matter
jurisdiction; and
(5) The Clerk of Court is DIRECTED to TERMINATE this case.
DATED: March 25, 2026 BY THE COURT:
_________________________
Nina Y. Wang
United States District Judge
Case No. 1:25-cv-00058-NYW-SBP Document 32 filed 03/25/26 USDC Colorado
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