Ford O'Brien Landy LLP Files Petition for Certiorari in Khudainatov v. United States

Petition Asks Supreme Court to Resolve Circuit Split Over Whether Legal Title Confers Standing to Contest Civil Forfeiture

NEW YORK, Oct. 30, 2026 /PRNewswire/ -- Ford O'Brien Landy LLP has filed a petition for a writ of certiorari in the United States Supreme Court in Khudainatov v. United States, on behalf of Eduard Khudainatov and Millemarin Investments Ltd. The petition asks the Court to decide whether holding legal title to property the government seeks to forfeit is enough to give the owner Article III standing to contest the forfeiture.

The petition arises from the government's civil forfeiture of the M/Y Amadea, a superyacht commissioned and paid for by Mr. Khudainatov and titled to Millemarin. The government alleged that a different person, a sanctioned individual who never appeared in the case, was the yacht's true owner. The government also alleged that about $1.2 million in maintenance payments made through U.S. financial institutions violated sanctions and made the entire vessel forfeitable. The vessel was reported to be worth more than $250 million. Millemarin's title to the Amadea was "uncontested." Even so, the Second Circuit held that title alone did not give petitioners standing to defend their property. After a bench hearing, the district court labeled petitioners "straw owners" and struck their claim. With no one left to oppose it, the court entered a default judgment of forfeiture. The government later sold the vessel for $187 million.

The petition shows that the federal courts of appeals are divided four to four on the question. The Fourth, Seventh, Eighth, and Eleventh Circuits treat title as sufficient for standing and leave disputes over "true" ownership to be decided on the merits. The First, Second, Third, and Ninth Circuits require title holders to prove additional "dominion and control" before a court will hear their claim. The Seventh Circuit has expressly acknowledged the conflict. Adam C. Ford, founding partner of Ford O'Brien Landy, is counsel of record for petitioners and authored the petition with Renée Jarusinsky, Anjula Prasad, Arthur Kutoroff, and Carolyn Sartori.

"Under the Second Circuit's rule, the government can take property worth hundreds of millions of dollars without ever proving its case. It only has to allege that the person who holds title isn't the real owner," stated Adam C. Ford. "In half the country, a title holder gets a jury and the government bears the burden of proof. In the other half, the owner is shown the courthouse door. The Supreme Court should end that disparity."

The petition explains that the Second Circuit's rule conflicts with the Supreme Court's holding in Sprint Communications Co. v. APCC Services, Inc. that "legal title alone" is sufficient for Article III standing. The petition also shows that the rule cuts away three protections forfeiture claimants are entitled to:

1. The Civil Asset Forfeiture Reform Act of 2000 places the burden of proof on the government. The Second Circuit's rule shifts it back to the claimant.
   
   
2. The Seventh Amendment guarantees a right to a jury trial. The Second Circuit's rule replaces the jury with a judge at a preliminary hearing.
   
   
3. Owners are entitled to have a court test the government's complaint and decide whether the forfeiture is proportional. Under the Second Circuit's rule, no court ever does.

In this case, no court ever accepted the government's theory of forfeiture, yet the vessel was forfeited by default.

The filing reflects the firm's tradition of principled advocacy in its appellate practice. Additional information about Ford O'Brien Landy's appellate practice is available [here].

Adam C. Ford added, "Whether the yacht belonged to our clients or to someone else was the whole case. That question should have been decided by a jury, with the government bearing the burden Congress assigned it. Instead, it was decided against our clients as a 'standing' issue before the merits were ever reached. Members of the Court have repeatedly voiced concern about modern civil forfeiture practice, and this case presents the problem in its starkest form."

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SOURCE Ford O'Brien Landy LLP