United States v. Donovan G. Davis, Jr.

Opinion

USCA11 Case: 20-10773 Date Filed: 11/25/2020 Page: 1 of 11

[DO NOT PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

Nos. 20-10773; 20-10783 Non-Argument Calendar ________________________

D.C. Docket No. 6:14-cr-00043-CEM-DCI-2

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

versus

DONOVAN G. DAVIS, JR.,

Defendant-Appellant.

________________________

Appeals from the United States District Court for the Middle District of Florida ________________________

(November 25, 2020)

Before ROSENBAUM, NEWSOM, and ANDERSON, Circuit Judges.

PER CURIAM: USCA11 Case: 20-10773 Date Filed: 11/25/2020 Page: 2 of 11

In this consolidated appeal, Donovan Davis, Jr., appeals the district court’s

orders denying his post-judgment motions for equitable relief, for return of property

under Fed. R. Crim. P. 41(g), and for reconsideration of both denials. The

government, asserting that Davis’s claims are barred by the equitable doctrines of

“unclean hands” and laches, moves for summary affirmance. We grant the

government’s motion.

I.

Our decision concerns two appeals from the district court’s denials of four

motions that Davis filed pro se. For context, we provide a brief overview of Davis’s

conviction and litigation history before we address the government’s motion for

summary affirmance.

A.

In 2015, after a jury trial, Davis was convicted of participating in a scheme to

defraud through Capital Blu Management, LLC, a company that traded in the off-

exchange foreign currency, or “forex,” marketplace. The criminal case followed an

earlier civil case against Capital Blu brought by the U.S. Commodity Futures

Trading Commission (“CFTC”) in March 2009. In the civil case, the CFTC alleged

that Capital Blu, through Davis and two codefendants, violated anti-fraud provisions

of the Commodity Exchange Act. A jury found Davis guilty, and the court ordered

restitution, a civil monetary penalty, and injunctive relief in June 2011.

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After his criminal trial, upon the government’s motion, the district court

entered a preliminary order of forfeiture, which declared forfeited “any property,

real or personal, which constitute[d] or [wa]s derived from proceeds traceable to the

offenses alleged in [the counts of conviction].” After sentencing, the court entered

a final order of forfeiture consistent with its preliminary order.

We affirmed Davis’s convictions and total sentence in 2019. United States v.

Davis (Davis I), 767 F. App’x. 714 (11th Cir. 2019). The U.S. Supreme Court denied

his petition for a writ of certiorari in January 2020. Davis v. United States, 140

S. Ct. 973 (2020).

While his direct appeal was pending in this Court, Davis moved under Rule

41(g), Fed. R. Crim. P., for the return of six computer hard drives which, he

contended, “contained electronic copies of the books and records of Capital Blu.”

Evidence produced by the government in response to Davis’s motion showed that in

2009 Davis’s counsel provided six computer hard drives to a court-appointed

receiver in connection with the civil-enforcement action brought by the CFTC. The

receiver, in turn, copied these drives onto external hard drives and provided the

external hard drives to the CFTC, the IRS, and the U.S. Attorney’s Office. In March

2010, the Secret Service came into possession of one of the external hard drives

through an IRS agent. In September 2017, the Secret Service contacted Davis to

return the external hard drive after erasing its contents.

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The district court denied his motion, and we affirmed. United States v. Davis

(Davis II), 789 F. App’x 105 (11th Cir. 2019). We concluded that the district court

did not clearly err in finding that the government never possessed the six computer

hard drives at issue. Id. at 109-11. And because we could not “order the government

to return something that it does not possess,” we affirmed the denial of Davis’s Rule

41(g) motion. Id. at 111. On appeal, Davis also sought return of a laptop and DVDs,

but we declined to determine whether he was entitled to their return, as he had not

sought return of those items below. Id. at 108 n.2.

B.

In September 2019, Davis filed a pro se motion for return of property,

pursuant to Rule 41(g), seeking the return of a laptop that, he contended, was not

covered by the district court’s forfeiture order. He attached an inventory form, which

he stated he received from the Secret Service in 2017, that indicated that a laptop

was taken from Capital Blu in 2008 and later placed in a vault. He also attached an

affidavit from his mother, who stated that she accompanied him to purchase the

laptop, which he intended to use at Capital Blu, and she later helped him move

furniture, including the laptop, into his Capital Blu office.

The government opposed Davis’s motion, asserting that return of the laptop

was not possible because it had taken possession of the laptop in November 2008

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and destroyed it in October 2017. Davis replied that, although the laptop had been

destroyed and could not be returned, he was still entitled to equitable relief.

A magistrate judge denied Davis’s motion as moot in November 2019, finding

that the government’s assertion that the laptop had been destroyed was credible. It

granted Davis leave to file a renewed motion seeking equitable relief.

In December 2019, Davis filed the instant motion for equitable relief. He

stated that the laptop “contained copies of all financial records of Capital Blu and

the communications amongst its principals, managers, employees, and traders.” As

an equitable remedy, he requested that the government provide an individual with

knowledge of the contents of his laptop to meet with him; stipulate as to the contents

of the laptop; and provide a complete list of all persons who had custody of the

laptop, had access to the device information, or participated in the device’s

destruction. Davis requested an evidentiary hearing in the event a stipulation could

not be reached. He further requested a “substitute machine,” a compilation of any

records the government had of the electronic data, and “an equivalent algorithm to

the trading application” lost in the destruction of the laptop.

On February 4, 2020, the district court denied Davis’s motion for equitable

relief in a paperless order, stating that it incorporated by reference the magistrate

judge’s earlier order denying Davis’s motion for return of the laptop as well as the

final order of forfeiture.

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On February 14, Davis moved for reconsideration, arguing that the laptop and

its contents were not subject to the forfeiture order. On February 18, the district

court denied his motion for reconsideration without explanation.

C.

On February 5, 2020, Davis filed a “Motion for Return of Electronically

Stored Property,” which appeared to seek return of electronic data that had been

stored on the six hard drives at issue in Davis II and was later transferred to the

external hard drive that was erased by the Secret Service before being returned to

Davis. Davis argued that the government had admitted in other litigation that,

although the hard drives themselves had been destroyed, the data taken from them

still existed in some form and because his conviction became final when the Supreme

Court denied certiorari in his direct appeal, the government had no legitimate basis

to keep it.

On February 6, the district court denied his motion in a paperless order, once

again incorporating by reference the magistrate judge’s earlier order denying his

motion for return of the laptop and the final order of forfeiture.

On February 20, Davis moved for reconsideration, arguing that the data was

not subject to the forfeiture order. On February 21, the district court denied his

motion for reconsideration without explanation.

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D.

Davis appealed from the district court’s February 18, 2020, order denying his

motion for reconsideration and its underlying order denying his motion for equitable

relief regarding the destruction of his laptop and its contents. He filed a separate

notice of appeal from the district court’s February 21, 2020, order denying his

motion for reconsideration and its underlying order denying his motion for return of

the “electronically-stored property.” We granted the government’s motion to

consolidate the two appeals.

After Davis filed his initial brief, the government moved for summary

affirmance. For the reasons that follow, we grant the government’s motion.

II.

Summary disposition is appropriate where “the position of one of the parties

is clearly right as a matter of law so that there can be no substantial question as to

the outcome of the case, or where, as is more frequently the case, the appeal is

frivolous.” Groendyke Transp., Inc. v. Davis, 406 F.2d 1158, 1162 (5th Cir. 1969).1

We review do novo the district court’s denial of a motion to return property

and its factual findings dealing with such a denial for clear error. United States v.

Howell, 425 F.3d 971, 973 (11th Cir. 2005). As for “the equitable equation of the

1 In Bonner v. City of Prichard, 661 F.2d 1206, 1209 (11th Cir. 1981) (en banc), this Court adopted as binding precedent all Fifth Circuit decisions issued before October 1, 1981.

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district court’s decision” to deny the motion, we review that for abuse of discretion

only. United States v. Machado, 465 F.3d 1301, 1307 (11th Cir. 2006), overruled

on other grounds by United States v. Lopez, 562 F.3d 1309, 1311 (11th Cir. 2009).

We may affirm for any reason supported by the record, even if not relied upon by

the district court. United States v. Chitwood, 676 F.3d 971, 975 (11th Cir. 2012).

Under Federal Rule of Criminal Procedure 41(g), an individual whose

property has been seized by the government may file a motion for return of the

property. Fed. R. Crim. P. 41(g).2 When a defendant invokes Rule 41(g) after the

close of criminal proceedings, the court treats the motion as a civil action in equity.

United States v. Potes Ramirez, 260 F.3d 1310, 1314 (11th Cir. 2001). The district

court may exercise equitable jurisdiction and fashion an appropriate remedy even if

it finds that the property has been destroyed. Id. at 1314-15. For the district court

to exercise equitable jurisdiction, the property owner “must show that he had a

possessory interest in the property seized by the government” and that he has “clean

hands” with respect to the property. Howell, 425 F.3d at 974. Additionally, courts

should consider the applicability of other equitable defenses, such as the doctrine of

laches. Potes Ramirez, 260 F.3d at 1315.

2 Prior to 2002, this rule was codified at Fed. R. Crim. P. 41(e). 8 USCA11 Case: 20-10773 Date Filed: 11/25/2020 Page: 9 of 11

IV.

As an initial matter, Davis argues, and the government concedes, that neither

his laptop nor the data stored on the external hard drive were subject to the district

court’s forfeiture order, as the government did not take the required steps to forfeit

those items. Nevertheless, we grant the government’s motion for summary

affirmance because the government’s position that Davis is not entitled to equitable

relief is clearly correct as a matter of law, and there is no substantial question as to

the outcome of the appeal. Groendyke Transp., Inc., 406 F.2d at 1162; see Chitwood,

676 F.3d at 975.

As Davis acknowledges, both his motions were actions in equity: his

December 2019 motion because he sought an equitable remedy for the destruction

of his laptop, and his February 2020 motion because he filed a Rule 41(g) motion

after his criminal proceedings had ended. See Potes Ramirez, 260 F.3d at 1313-14.

First, Davis’s claim for equitable relief for the destruction of his laptop is barred by

his “unclean hands” because the laptop was linked to his fraudulent scheme, as he

admitted in his motion that it contained Capital Blu’s records and communications.

See Howell, 425 F.3d at 974. Moreover, the government’s contention that the

doctrine of laches bars Davis’s claim is correct because Davis did not seek the return

of his laptop until eleven years after he provided it to the Secret Service. See Potes

Ramirez, 260 F.3d at 1315. Davis’s assertion that he did not know that the

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government had the laptop until 2018 is without merit because he admitted that he

turned the laptop over to the Secret Service in 2008 and knew that the laptop was

not encompassed in the district court’s 2015 forfeiture order, yet he did not seek its

return until 2019.

Next, Davis’s “unclean hands” also bar equitable relief regarding his February

2020 motion for the return of the data that was erased from the external hard drive.

The data he sought was compiled from the six computer hard drives taken from

Capital Blu’s offices and provided to the receiver by Davis’s counsel. See Davis II,

789 F. App’x at 109. As Davis explained in his prior Rule 41(g) motion seeking

return of the hard drives themselves, the data “contained electronic copies of the

books and records of Capital Blu.” As it is linked to his fraudulent conduct, Davis

is not entitled to return of this data. See Howell, 425 F.3d at 974.

Finally, because Davis did not present new evidence, the district court did not

abuse its discretion by denying Davis’s motions for reconsideration. See Jacobs v.

Tempur-Pedic Int’l, Inc., 626 F.3d 1327, 1344 (11th Cir. 2010) (stating that, in the

civil context, the only grounds for granting a Fed. R. Civ. P. 59(e) motion to alter or

amend a judgment are newly discovered evidence or manifest errors of law or fact).

Therefore, because the government’s position is clearly correct as a matter of

law and there is no substantial question as to the outcome of the case, we GRANT

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the government’s motion for summary affirmance. See Groendyke Transp., Inc.,

406 F.2d at 1162.

AFFIRMED.