Court: United States Court of Appeals for the Ninth Circuit

Filed: 2026-09-23

Docket: 5:19-cv-02337-

The ninth-circuit reversed the district court’s grant of summary judgment for the federal government in Lionel Cannon’s motion under Federal Rule of Criminal Procedure 41(g) seeking the return of $218,000 in cash seized by FBI agents but subsequently stolen by Special Agent Scott Bowman. The court held that sovereign immunity does not bar a Rule 41(g) claim when the government has lost seized cash but later recovers funds traceable to those specific proceeds through criminal forfeiture proceedings against the thief. Relying on the fungible nature of money, the panel determined that recovering the value of the stolen currency constitutes the “return” of property rather than a claim for money damages, distinguishing this scenario from cases where lost or destroyed property cannot be recovered at all. Under this standard, once the government recovers traceable funds, it bears the burden of demonstrating a legitimate reason to retain them. The court found that the government failed to meet this burden because it conceded it had not initiated forfeiture proceedings for the stolen amount due to the statute of limitations and offered no evidence that Cannon lacked lawful possession of the intermingled funds, despite Cannon providing specific documentation regarding lawful sources such as employment income and car sales. Consequently, the case is remanded to the district court for further proceedings to determine the exact amount of recovered funds traceable to Cannon’s safe and to adjudicate his entitlement to their return.

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