Security Deposit Box Owners Who Sued Over Missing Property Win First Round in Their Cases

LOS ANGELES—The federal lawsuits of security deposit renters whose valuables were not returned after the FBI’s 2021 raid of US Private Vaults will move forward after a court order issued late last week. Last year, Don Mellein, Jeni Pearsons, and her husband Michael Storc joined with the Institute for Justice (IJ) to file two separate lawsuits demanding that the government return their coins and cash. The FBI’s raid on the security deposit box company was recently declared unconstitutional by the 9th U.S. Circuit Court of Appeals in a separate, class action lawsuit.

“This ruling is a major step forward in holding the FBI accountable for the reckless and unconstitutional way it handled private property,” said IJ Attorney Joe Gay. “When the government seizes property, it takes on the responsibility of keeping that property safe. Don, Jeni, and Michael did nothing wrong and the court agreed that they should have an opportunity to prove their case and be made whole.”

Don rented a security deposit box to keep safe precious coins he had purchased as retirement savings. Jeni and Michael stored precious metals and cash in their box. They all were effectively forced to prove their innocence in order to keep the government from permanently taking their property. But when the government gave up on its forfeiture efforts, it failed to return 63 precious metal coins worth more than $100,000 to Don and $2,000 in cash to Jeni and Michael.

“It was frightening to have much of our retirement savings in the government’s hands when we had done nothing wrong,” said Jeni. “It was infuriating when the government gave up and failed to return everything it took. I’m pleased that the judge will let our case move forward, but this never should have happened in the first place.”

IJ’s earlier class action lawsuit shined a light on the FBI’s raid, uncovered the agency’s forfeiture motives, and showed how the FBI’s rushed inventory of hundreds of boxes could have resulted in misplaced property. The agent in charge of forfeitures testified that months before seeking a warrant for the raid, the FBI had already planned to try to take any box with property worth more than $5,000 using civil forfeiture. All told, the FBI sought forfeiture of more than $85 million in cash and tens of millions of dollars’ worth of precious metals, jewelry, and poker chips.

Don, Jeni, and Michael are also represented by local counsel Nilay Vora and Jeff Atteberry of the Vora Law Firm PC.