California Palms Addiction Recovery Campus, Inc.; Sebastian Rucci v. United States of America

RECOMMENDED FOR PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 25a0306p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
CALIFORNIA PALMS ADDICTION RECOVERY CAMPUS,
INC.; SEBASTIAN RUCCI,
Plaintiffs-Appellants,
v.
UNITED STATES OF AMERICA,
Defendant-Appellee.
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No. 24-4101
Appeal from the United States District Court for the Northern District of Ohio at Youngstown.
No. 4:21-cv-02188—John R. Adams, District Judge.
Decided and Filed: November 6, 2025
Before: WHITE, STRANCH, and MURPHY, Circuit Judges.
_________________
COUNSEL
ON BRIEF: Sebastian Rucci, LAW OFFICES OF SEBASTIAN RUCCI, P.C., Huntington
Beach, California, for Appellant California Palms and in propria persona. Rema A. Ina,
UNITED STATES ATTORNEY’S OFFICE, Cleveland, Ohio, for Appellee.
_________________
OPINION
_________________
JANE B. STRANCH, Circuit Judge. Following law enforcement’s seizure of funds in
the amount of $603,902.89 from California Palms Addiction Recovery Campus, Inc., the facility
and its owner brought a civil action seeking recovery of the funds and, in addition, disclosure of
the affidavits on which the Government relied to secure warrants to seize the funds. While this
litigation was pending, the Government moved for voluntary dismissal in a parallel forfeiture
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proceeding and voluntarily returned the funds to the Plaintiffs. The district court, acting sua
sponte and citing the voluntary return of the funds, dismissed this case as moot, even though the
Plaintiffs contended they still had a right to disclosure of the warrant affidavits. Because we find
there is still a live case or controversy over the claim seeking disclosure of the affidavits, we
VACATE IN PART the district court’s sua sponte dismissal and REMAND for further
proceedings.
I. BACKGROUND
At some point in 2021, California Palms, a rehabilitation center located in Ohio, and its
owner, Sebastian Rucci,1 became the subjects of a criminal investigation by the Federal Bureau
of Investigation (FBI). On October 4, 2021, a magistrate judge issued ex parte warrants for the
seizure of funds from California Palms and Rucci. The FBI executed those warrants the
following day, seizing $603,902.89. Later that month, the Ohio Department of Mental Health
and Addiction Services revoked California Palms’s provider certification, and the Ohio
Department of Medicaid terminated its provider agreement.
On November 17, 2021, California Palms and Rucci filed a civil action (the “Plaintiffs’
Action”), with a verified complaint subtitled “(Return of Unlawfully Seized Funds and
Injunctive Relief),” in the Northern District of Ohio. The complaint alleges, in relevant parts,
(1) several constitutional defects in the seizure warrants, and (2) that California Palms and Rucci
have “a right under the Warrant Clause of the Fourth Amendment to inspect and copy the
affidavit upon which the warrant was issued.” R. 1, Compl., PageID 3–6, 8. In the same section
regarding this alleged right, the complaint elaborates,
Plaintiffs seek a redacted copy of the affidavit to determine what facts support the
[magistrate judge’s] finding that the three restraining orders under § 853(e) are
insufficient to protect the forfeitable assets. Plaintiffs have already shown that the
agent securing the warrants submitted facially defective warrants. Hence, the
need for the affidavit is necessary to confirm that the Government is following
what the Supreme Court and Congress mandated.
1Rucci is also the attorney representing California Palms and himself in this litigation.

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Id. at 8. The complaint does not contain a separate “Claims for Relief” section enumerating
California Palms and Rucci’s claims. It concludes with a prayer for several forms of relief,
including specific requests (1) “that the United States of America immediately return to Plaintiffs
the $603,902 unlawfully seized” and (2) “[t]hat the Court order the Government to produce to
the Plaintiffs a redacted copy of the affidavit used to secure the seizure warrants.” Id. at 19–20.
On December 1, 2021, the Government moved to stay the Plaintiffs’ Action, noting it
intended to file a civil forfeiture action against the seized funds. The Government then filed the
“Forfeiture Proceeding” on January 11, 2022, and, on January 21, 2022, moved to dismiss the
Plaintiffs’ Action, citing the Forfeiture Proceeding. The Government argued that “Rule 41(g) is
an equitable remedy that is available only when there is no adequate remedy at law. . . . Once
the government has initiated civil forfeiture proceedings, Plaintiffs are required to follow the
statutory proceedings in forfeiture actions to establish their entitlement to return of their
property.” R. 21, Mot. to Dismiss, PageID 263. The motion did not refer to Federal Rule of
Civil Procedure 12, nor did it identify any specific Rule 12(b) ground for dismissal. On February
10, the district court issued an order (1) staying the Plaintiffs’ Action, “[o]ut of an abundance of
caution,” pending resolution of the Forfeiture Proceeding; and (2) denying without prejudice the
motion to dismiss, as well as other pending motions, “subject to refiling following resolution of
the related action.” R. 24, Order, PageID 275.
On September 17, 2024, the Government moved for voluntary dismissal in the Forfeiture
Proceeding, noting that “[u]pon dismissal the government intends to return the defendant seized
funds to Claimant with interest.” Case No. 4:22-cv-57; R. 25 PageID 224. The Forfeiture
Proceeding was dismissed on September 26, 2024. Case No. 4:22-cv-57; R. 27 PageID 230–31.
On the same day, the district court issued an order in the Plaintiffs’ Action citing the dismissal of
the Forfeiture Proceeding and stating, “As that dismissal will result in the return of the funds that
are also at issue in this matter, Plaintiffs are ordered to show cause by October 7, 2024 why this
matter should not be dismissed as moot.” R. 27, Order, PageID 279. California Palms and Rucci
opposed dismissal, contending that the case was not moot because they were still entitled to

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disclosure of the warrant affidavits.2 California Palms and Rucci also argued in support of that
disclosure that they “believe the United States attorneys were duped by OhioMHAS [the Ohio
Department of Mental Health and Addiction Services] and seek release of the affidavits to pursue
claims against OhioMHAS.” R. 30, Reply to Order, PageID 307. On October 16, 2024, the
Government filed a notice indicating that the funds had been returned with interest, and that
Rucci had confirmed receipt.
On December 6, the district court issued a short order dismissing the Plaintiffs’ Action as
moot, reasoning as follows:
Plaintiff has received the relief sought by the complaint—the return of the seized
funds with interest. Plaintiff effectively argues that the seizure warrant affidavits
are necessary to determine whether additional litigation is appropriate against a
third party. There is no basis to allow this litigation to move forward when there
is no further relief that Plaintiff can obtain from the Government. Plaintiff’s
desire to perhaps hold a third party responsible for the seizure is insufficient to
maintain a case in controversy to continue to invoke this Court’s jurisdiction.
Accordingly, the complaint is DISMISSED AS MOOT.
R. 31, Order and Judgment Entry, PageID 313–14. The Government never filed criminal
charges against California Palms or Rucci.
II. LEGAL STANDARD
“Under Article III of the United States Constitution, federal courts have the power to
adjudicate only ‘Cases’ and ‘Controversies.’” Mokdad v. Sessions, 876 F.3d 167, 169 (6th Cir.
2017) (citing Already, LLC v. Nike, Inc., 568 U.S. 85, 90 (2013)). Part of what Article III
requires is that there be a live case or controversy—“when the issues presented are no longer
‘live’ or the parties lack a legally cognizable interest in the outcome,” a case becomes moot.
Already, 568 U.S. at 91 (quoting Murphy v. Hunt, 455 U.S. 478, 481 (1982) (per curiam)).
When the case-and-controversy requirement is not satisfied, federal courts lack subject-matter
jurisdiction. See Mokdad, 876 F.3d at 170. In addition, the Federal Rules of Civil Procedure
require that if a “court determines at any time that it lacks subject-matter jurisdiction, the court
2Where the complaint referred to a singular “affidavit,” California Palms and Rucci refer to “affidavits” in
the plural in their briefing on the show-cause order. Because it is not clear how many affidavits were used to secure
the warrants, the plural will be used here.

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must dismiss the action” sua sponte. Fed. R. Civ. P. 12(h)(3). Appellate courts review
dismissals for lack of subject-matter jurisdiction de novo. See Mokdad, 876 F.3d at 169.
III. ANALYSIS
The parties’ briefing focuses on the underlying merits—that is, whether California Palms
and Rucci are entitled to the warrant affidavits. We do not reach the merits, however, because
the district court erred in dismissing the case as moot. “An issue becomes moot when it becomes
impossible for the court to grant ‘any effectual relief whatsoever’ on that issue to a prevailing
party.” Smith v. Plati, 258 F.3d 1167, 1179 (10th Cir. 2001) (quoting Church of Scientology v.
United States, 506 U.S. 9, 12 (1992)). Put differently, “[m]ootness results when events occur
during the pendency of a litigation which render the court unable to grant the requested relief.”
Carras v. Williams, 807 F.2d 1286, 1289 (6th Cir. 1986). For instance, “a prisoner’s request for
injunctive and declaratory relief [relating to prison conditions] becomes moot when he is
transferred to another facility.” Price v. Stephenson, 2019 WL 2603540, at *2 (6th Cir. Apr. 26,
2019) (citing Parks v. Reans, 510 F. App’x 414, 415 (6th Cir. 2013); Kensu v. Haigh, 87 F.3d
172, 175 (6th Cir. 1996)). In Mokdad, for another example, a complaint seeking the removal of
the plaintiff from the “No Fly List” became moot when the Terrorist Screening Center informed
the plaintiff he was not on the list. See 876 F.3d at 168–71; but see FBI v. Fikre, 601 U.S. 234,
242–45 (2024).
Here, the Plaintiffs’ Action is clearly moot as to the funds. California Palms and Rucci
filed suit seeking return of the funds, and, while the Plaintiffs’ Action was pending, the
Government voluntarily returned the funds with interest. The complaint does not seek only the
return of the funds, however; it seeks the return of the funds and—separately—disclosure of the
affidavits. The complaint alleges California Palms and Rucci have a right to disclosure of the
warrant affidavits, and it ends with a prayer for relief that includes a request for an injunction
ordering the Government “to produce to the Plaintiffs a redacted copy of the affidavit used to
secure the seizure warrants.” Nothing in the record indicates that the Government has disclosed
the contents of the warrant affidavits to California Palms and Rucci in any manner. Nor is there
any indication that they have been apprised of the contents of the warrant affidavits by some
other means that would render California Palms and Rucci unable to obtain “any effectual relief

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whatever” from the Government. Church of Scientology, 506 U.S. at 12 (quoting Mills v. Green,
159 U.S. 651, 653 (1895)). These facts do not support a determination that the request for
disclosure of the warrant affidavits is moot.
The Government offers an alternate explanation for the district court’s dismissal: that
there is no available cause of action that would permit California Palms and Rucci to seek
disclosure of the warrant affidavits. It construes this case as brought under Federal Rule of
Criminal Procedure 41(g) and, in turn, argues that Rule 41(g) does not allow a party to seek
disclosure of warrant affidavits as a remedy when there has been no criminal indictment. Rule
41(g) allows “[a] person aggrieved by an unlawful search and seizure of property or by the
deprivation of property [to] move for the property’s return.” When a party files a civil complaint
citing Rule 41(g) in certain circumstances (typically after a criminal proceeding has concluded),
courts construe the proceeding as a civil action in equity. See Allen v. Grist Mill Cap., LLC, 88
F.4th 383, 394 (2d Cir. 2023).
In any event, the problem with the Government’s alternate explanation is that the absence
of an applicable cause of action cannot be the basis for a sua sponte dismissal for lack of subject
matter jurisdiction. Rule 12(h)(3) of the Federal Rules of Civil Procedure mandates sua sponte
dismissal “[i]f the court determines at any time that it lacks subject-matter jurisdiction.” But as
the Supreme Court explained long ago in Bell v. Hood, the lack of a cause of action is not
jurisdictional:
[I]t is well settled that the failure to state a proper cause of action calls for a
judgment on the merits and not for a dismissal for want of jurisdiction. Whether
the complaint states a cause of action on which relief could be granted is a
question of law . . . [that] must be decided after and not before the court has
assumed jurisdiction over the controversy.
327 U.S. 678, 682 (1946). Or as the Court explained decades later, “the absence of a valid (as
opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i.e., the
courts’ statutory or constitutional power to adjudicate the case.” Steel Co. v. Citizens for a Better
Env., 523 U.S. 83, 89 (1998). This distinction is also evident in the Supreme Court’s
jurisprudence on implied private rights of action. For example, in Stoneridge Investment
Partners, LLC v. Scientific-Atlanta, the Court upheld a dismissal for failure to state a claim when

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it found that the plaintiffs could not avail themselves of an implied right of action in Section
10(b) of the Social Security Act. See 552 U.S. 148, 152, 155, 165–67 (2008). Crucial to this
example for present purposes is that a defendant had to file a motion to dismiss for failure to
state a claim before the district court could dismiss the case for lack of a cause of action. See id.
at 155. Simply put, Rule 12 does not allow for sua sponte dismissal for failure to state a claim.
Compare Fed. R. Civ. P. Rule 12(h)(3), with Rule 12(b).
In Stewart v. Martin, we vacated a district court’s dismissal when a similar issue arose.
See 143 F.4th 675, 680––83, 685 (6th Cir. 2025). Following a jury trial regarding distributions
from a trust, a defendant moved for relief from the jury’s verdict on the ground that the plaintiffs
lacked a viable cause of action under applicable Ohio law. See id. at 680. The district court
granted the motion and dismissed the case, reasoning that the plaintiffs lacked a cause of action
against the defendant and, as a result, the case lacked Article III standing. See id. at 680–81. As
we explained before vacating the dismissal, “[e]ven if the plaintiffs lacked a cause of action to
challenge [the defendant]’s distributions, the district court had subject-matter jurisdiction to
decide this case.” Id. at 682.
The Government argues that California Palms and Rucci lack a cause of action to seek
disclosure of the warrant affidavits, but we generally do not address the merits of such an issue
before the district court has ruled on it. See id. at 681–85. Should the Government choose to
raise this argument in the district court, it must do so on an appropriate dispositive motion under
Rule 12 or Rule 56. Yet regardless of what the district court decides and in what procedural
posture, it must rule on California Palms and Rucci’s request for disclosure of the warrant
affidavits, because that request is not moot. A finding of mootness must be based on a factual
occurrence in the world, not the legal unavailability of a remedy. See Carras, 807 F.2d at 1289.
IV. CONCLUSION
For the foregoing reasons, the district court’s order is hereby VACATED to the extent it
dismisses the claim for disclosure of the warrant affidavits as moot. This matter is
REMANDED to the district court for further proceedings in accordance with this opinion.

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