16-4025-cv
Higgins Ave., LLC v. Stathakis

                                  UNITED STATES COURT OF APPEALS
                                      FOR THE SECOND CIRCUIT

                                           SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED
BY FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 17th day of October, two thousand seventeen.

PRESENT: JOHN M. WALKER, JR.,
                 REENA RAGGI,
                 PETER W. HALL,
                                 Circuit Judges.
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HIGGINS AVENUE, LLC,
                                 Interested Party-Appellant,

UNITED STATES OF AMERICA,
                   Plaintiff,

                                 v.                                      No. 16-4025-cv

LARRY STATHAKIS,
                                      Defendant-Appellee,

EVANGELOS GERASIMOU, GEORGIOS
GERASIMOU,
                                 Defendants.
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APPEARING FOR APPELLANT:                          TODD C. STECKLER, Berkman, Henoch,
                                                  Peterson, Peddy & Fenchel, P.C., Garden City,
                                                  New York.

APPEARING FOR APPELLEE:                           BRIAN L. GARDNER, Cole Schotz, P.C., New
                                                  York, New York.
       Appeal from an order of the United States District Court for the Eastern District of

New York (Carol Bagley Amon, Judge).

       UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the order entered on November 1, 2016, is AFFIRMED.

       Higgins Avenue, LLC (“Higgins”) invoked the All Writs Act, see 28 U.S.C. §

1651, to move for a permanent injunction barring criminal defendant Larry Stathakis

from pursuing a state-court action seeking title to 133-01/05 Higgins Drive, Flushing,

New York (the “Property”) based on the purported issue-preclusive effects of a

preliminary order of forfeiture entered against Stathakis in the federal criminal

proceedings. The district court concluded that it was deprived of jurisdiction by the

Anti-Injunction Act, see 28 U.S.C. § 2243, and that the exception for relitigation of

matters previously decided by a federal court was inapplicable. On appeal pursuant to

28 U.S.C. § 1292(a)(1), Higgins faults the district court’s jurisdictional conclusion,

arguing that Stathakis fully litigated his forfeited interest in the Property during his

criminal proceedings.    In reviewing the challenged ruling, we examine the district

court’s factual findings for clear error and its interpretation of the All Writs Act and the

Anti-Injunction Act de novo. See Wyly v. Weiss, 697 F.3d 131, 137 (2d Cir. 2012).

Although we agree with Higgins that the value of Stathakis’s forfeited property interest

was litigated in prior criminal proceedings, we affirm the challenged denial because the

question of whether Stathakis or Higgins possessed lawful pre-forfeiture title to the


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Property was not. We assume the parties’ familiarity with the facts and record of prior

proceedings, which we reference only as necessary to explain our decision to affirm.

       “The All Writs Act . . . authorizes federal courts to ‘issue all writs necessary or

appropriate in aid of their respective jurisdictions and agreeable to the usages and

principles of law.’” Id. at 137 (quoting 28 U.S.C. § 1651(a)). “This grant of authority is

limited by the Anti-Injunction Act . . . which bars a federal court from enjoining a

proceeding in state court unless that action is ‘expressly authorized by Act of Congress,

or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.’”

Id. (quoting 28 U.S.C. § 2283). Only the third exception—the so-called “relitigation

exception”—is relevant to this appeal. Id. This exception, “which was designed to

implement well-recognized concepts of claim and issue preclusion, authorizes a federal

court to enjoin state litigation of a claim or issue that previously was presented to and

decided by the federal court.”     Id. at 139 (internal quotation marks omitted).       In

applying the principle here, we follow the Supreme Court’s direction that “any doubts as

to the propriety of a federal injunction against state court proceedings should be resolved

in favor of permitting the state courts to proceed in an orderly fashion to finally

determine the controversy.” Id. at 137 (internal alteration omitted) (quoting Atlantic

Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 297 (1970)).




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       “[T]he federal common law” of issue preclusion, which applies here,1 imposes

four requirements: that “(1) the identical issue was raised in a previous proceeding;

(2) the issue was actually litigated and decided in the previous proceeding; (3) the parties

had a full and fair opportunity to litigate the issue; and (4) the resolution of the issue was

necessary to support a valid and final judgment on the merits.” Id. at 140-41 (internal

quotation marks and alteration omitted). In the context of the Anti-Injunction Act’s

relitigation exception, we apply this doctrine narrowly, as “a court does not usually get to

dictate to other courts the preclusion consequences of its own judgment,” a matter that is

“usually the bailiwick of the second court—in this case, the New York state court.” Id.

at 140 (internal quotation marks omitted).

       On appeal, Higgins and Stathakis dispute the preclusive effect of the district

court’s rulings in the criminal proceeding that (1) Stathakis’s collective property interests

did not exceed the value of his money forfeiture judgment, and (2) he would forfeit any

rights in the Property to the federal government.      Although both of these issues were

decided against Stathakis by entry of his criminal judgment and preliminary order of

forfeiture, see App’x 338–39, 361–64 (concluding that total value of asserted property

1
  Higgins’s contentions that claim preclusion principles should be applied, and that Wyly
v. Weiss is inapplicable, are “not sufficiently argued in the briefs,” and, therefore, merit
no further discussion. Norton v. Sam’s Club, 145 F.3d 114, 119 (2d Cir. 1998). In any
event, to the extent Higgins seeks application of the Anti-Injunction Act’s “in aid of
jurisdiction” exception for property over which a federal district court has control, see
Wyly v. Weiss, 697 F.3d at 137–38, Higgins raised no such argument in the district court,
and the exception would not apply here because Higgins itself possesses the property
following its removal from the final order of forfeiture.


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rights did not exceed money forfeiture judgment); id. at 363 (directing that Stathakis

“forfeit all of his right, title and interest” in the Property), we do not understand either of

these issues to be disputed in state court.

       The narrow issue presented in the state-court proceeding is whether Higgins

fraudulently secured title to the Property from Stathakis’s limited liability company

before his preliminary order of forfeiture was entered. That issue was not litigated in

Stathakis’s criminal proceedings; rather, the district court presumed—for purposes of

substitute-property calculation—that Stathakis’s state-court representations regarding his

ownership of the Property were meritorious.         Higgins does not urge application of

preclusion to the district court’s reliance on Stathakis’s representations of ownership,

which would not assist it. In any event, Higgins itself did not litigate any claim to the

Property against Stathakis during his criminal case. Rather, Higgins secured possession

of the Property only through a third-party ancillary proceeding in which the government

agreed to relinquish the Property to it. See 21 U.S.C. § 853(n) (authorizing third parties

to assert claims to ownership of property following entry of preliminary order of

forfeiture).

       In sum, because Stathakis and Higgins did not litigate, during the criminal case,

the issue of who possessed lawful pre-forfeiture title to the Property, the relitigation

exception to the Anti-Injunction Act is inapplicable. Having concluded that the district

court was correct in identifying its lack of jurisdiction to issue an injunction, we need not

reach Higgins’s alternative arguments.

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       In so ruling, we do not suggest that Stathakis can use the state-court proceeding to

obtain prospective title to the Property, a result expressly forbidden by the federal

criminal forfeiture statute. See 21 U.S.C. § 853(h) (“Any property right or interest not

exercisable by, or transferable for value to, the United States shall expire and shall not

revert to the defendant . . . .”); see also Fed. R. Crim. P. 32.2 (explaining that, “[a]t

sentencing . . . the preliminary forfeiture order becomes final as to the defendant”).

Rather, we understand that, consistent with representations made to the district court, if

the state court concludes that Stathakis possessed lawful title to the Property prior to the

entry of his criminal judgment, the government will seek an order directing Stathakis to

forfeit the Property. See App’x 485–86 (“If there was a final adjudication at state court

that the property was Mr. Stathakis’ the United States would move . . . to amend the final

order of forfeiture to include that property.”).

       We have considered Higgins’s other arguments and conclude that they are without

merit. Accordingly, we AFFIRM the judgment of the district court. We further direct

the Clerk of Court to mail a copy of this order to the United States’ counsel of record in

the criminal proceedings.

                                            FOR THE COURT:
                                            Catherine O’Hagan Wolfe, Clerk of Court




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