Forfeiture

"They don't have to convict you. They don't even have to charge you with a crime. But they have your property. "

--Henry Hyde, as quoted in CNN Article

Introduction

Forfeiture, the government seizure of property connected to illegal activity, has been a major weapon in the Federal government's "war on drugs" since the mid-eighties. Two recent developments, however, have called attention to the darker side of this practice: a decision by New York City's Mayor, Rudolph Guiliani, to deploy forfeiture against drunk drivers, and a House-approved bill that would, if signed into law, drastically narrow the scope of the federal forfeiture statutes. Forfeiture is a potent deterent, as well as a revenue source on which law enforcement has grown increasingly dependent. However, it brings with it far fewer procedural safeguards than the criminal law.

In the words of former President George Bush, "Asset forfeiture laws allow the government to take the ill-gotten gains of drug kingpins and use them to put more cops on the streets." New York City Police Commissioner Howard Safir invoked deterence when he said, "We believe that ... the threat of civil forfeiture and the possibility of losing one's car, have served to reduce the number of motorists who are willing to take the chance of being caught driving drunk." On the other hand, a civil liberties group has filed suit challenging the legality and constitutionality of the New York City program. Citing some of the same constitutional concerns, the House passed a Bill that would drastically curtail the federal operation of the law.

Concerned about the the broad effect of federal forfeiture laws, Henry Hyde (R-Ill., House Judiciary Committee Chairman) and John Conyers (D-Mich., the senior Democrat on the Committee) teamed up to introduce the Civil Asset Forfeiture Reform Act in a rare display of bipartisan unity. The Representatives were concerned about the problem of police using seized property or funds to finance their own operations. As Bob Barr (R-Ga.) put it, "In many jurisdictions, it has become a monetary tail wagging the law enforcement dog." Testifying before the Judiciary Committee, Willie Jones of Nashville, TN, gave an example of this abuse. Engaged in the landscaping business, Mr. Jones planned to buy a shrubbery in Houston, TX. Nurseries prefer cash from out-of-town buyers, so Mr. Jones planned to go there with $9,000 in cash. Officers detained him at the airport: suspicious of the large amount of cash, they accused him of being involved in drug-related activities. They eventually let him go, but they kept the money, and refused to even give him a receipt for it. Because he did not have 10% of the money seized to put up as a bond, he could not afford to challenge the seizure in the usual way. Disturbed by this and other similar stories of excess, the House members voted to approve H.R. 1658 to curb this abuse. The Clinton administration said that the bill would have a negative impact on the war on drugs. The House soundly rejected an administration-favored alternative, however -- supporters of H.R. 1658 said the alternative bill would expand the federal power, not narrow it.

Most forfeiture activity occurs under Federal law, and most of that is connected to the traffic in illegal drugs. The Department of Justice established the National Assets Seizure and Forfeiture Fund in 1985 and realized $27 million from drug-related forfeitures that year. By 1992 the total take had climbed to $875 million. Many states followed suit by establishing their own civil forfeiture programs. Cities and other municipal governments have cooperated in forfeiture actions under both Federal and state drug laws. They have used such laws on their own to deal with local concerns ranging from unsafe housing to prostitution, and now for the problem of drunk driving.

The authority to seize property in this way is not inherent. Rather, it is established by statute. It is constrained by those authorizing laws and by the U.S. Constitution. The expansion of forfeiture activity has not gone on without Constitutional challenge. The U.S. Supreme Court has heard at least half a dozen forfeiture cases during the nineties, but its rulings have not done much to rein in the practice. This short survey of the law of forfeiture draws upon these Court decisions. Its introduction to the essential statutory provisions focuses on the Federal statutes. State and local provisions tend to be quite similar.

Forfeiture takes two distinct forms -- criminal and civil. Nearly all contemporary forfeiture involves the civil variety. Criminal forfeiture operates as punishment for a crime. It, therefore, requires a conviction, following which the state takes the assets in question from the criminal. Civil forfeiture rests on the idea (a legal fiction) that the property itself, not the owner, has violated the law. Thus, the proceeding is directed against the res, or the thing involved in some illegal activity specified by statute. Unlike criminal forfeiture, in rem forfeiture does not require a conviction or even an official criminal charge against the owner. This is the source of its attractiveness to law enforcement, and its threat to those concerned about abuse or circumvention of Constitutional protections.

 

Categories of Property Subject to Forfeiture

Bennis v. Michigan 517 U.S. 1163 (1996) (Stevens, J., dissenting).

Contraband

Property for which ownership by itself constitutes a crime, including smuggled goods, narcotics, and automatic weapons. The government's mandate in protecting the public forms the justification for seizure in this case.

Proceeds from Illegal Activity

Property directly resulting from, or that can be traced to, an illegal activity. Once a crime is identified, the government may seize any property flowing from the activity. In some cases, the government may seize property in lieu of provable criminal proceeds. Statutory innocent owner defenses provide a check on the seizure power, although this burden lies with the owner, not the government.

Tools or Instrumentalities Used in Commission of a Crime

Property used in the commission of a crime, including vehicles and real estate. By being associated with the crime, the property is "guilty" of the offense, and subject to seizure. In some cases, the innocence of the owner may not be a defense, although Constitution limitations, such as the Eighth Amendment's Excessive Fines Clause, may apply.

Criminal Forfeiture (In Personam)

What is it?

Criminal forfeiture is a punitive action by the government against the offender. Typically, it occurs as part of a sentence following a conviction. 18 U.S.C. § 982, through cross-referencing, creates a framework of offenses and procedures governing this type of forfeiture, as does 21 U.S.C. § 881. The statute provides for the forfeit of "any property, real or personal, involved in such offense, or any property traceable to such property." In addition, Rule 32.2 of the Federal Rules of Criminal Procedure governs criminal forfeiture proceedings in fedreal court. Depending on the crime, U.S. Customs procedures from Title 19 may also control.

The nature of the proceeding assures that the defendant is protected by the procedural rights embodied in the Fourth and Fifth Amendment. The property must be identified in the indictment in order to serve notice to the defendant, and opportunity must be given to contest the forfeiture.These notice and due process procedures are spelled out in Rules 32.2 of the Federal Rules of Criminal Procedure. The property must be identified in the indictment in order to serve notice to the defendant, and opportunity must be given to contest the forfeiture. After December 1, 2009, Rule 32 will require the government to also include a forfeiture notice in its presentencing report. Although the conviction requires the government to prove guilt "beyond a reasonable doubt," the forfeiture is subject to a lower burden--preponderance of the evidence. Furthermore, the burden shifts to the defendant once the government shows that the defendant acquired the property around the time of the crime, and no other likely source existed.

What about third parties?

Criminal forfeiture only severs the defendant's interest, so the property rights of third parties (co-owners, banks, and the like) are theoretically unaffected. However, third parties may be unaware of the forfeiture and the property's subsequent disposal. To protect third party interests, the government must provide notice and a hearing to all interested parties. At the hearing, the party must assert and prove their interest by preponderance of the evidence.

What defenses exist?

Since the forfeiture acts "against the person" and requires conviction of a crime, the first line of defense is against the conviction. A convicted defendant must shoulder the burden of proving the property did not have the necessary relationship to the crime in order to avoid the penalty.

Civil Forfeiture (In Rem)

What is it?

Unlike criminal forfeiture, civil forfeiture proceeds against the property, not the person. In theory, civil actions are remedial, not punitive like criminal proceedings. By acting civilly, the government seeks to remedy a harm, through the fiction of the property's "guilt."

The same statutes apply--18 U.S.C. § 981 (parallels 18 U.S.C. § 982) and 21 U.S.C. § 881. To complicate matters, these statutes incorporate by reference Customs procedures from 19 U.S.C. § 1602 involving searches, seizures, administrative procedure, holding, and disposal. When the government learns of a crime, establishes probable cause of the property's involvement (usually as an instrumentality), it may seize the property by executing a warrant. A criminal charge or conviction is not required to seize. Notice occurs through presentation of the warrant and publication in a newspaper. If a party files a claim within the answer period, a civil hearing commences. In uncontested situations, the forfeiture may be handled administratively.

Due to its civil nature, the roles of the parties change. Instead of prosecutor versus defendant, the hearing concerns a plaintiff, the United States in the case of Federal forfeitures, and a defendant, the property in question. The owner is effectively put in the position of being a third party claimant. Furthermore, civil hearings involve a more lenient burden of proof than "beyond a reasonable doubt." Once the government establishes probable cause that the property is subject to forfeiture, the owner must prove by "preponderance of the evidence" that it is not.

Since the government determines which form of forfeiture to use, it is not surprising that most are carried out using the civil (in rem) procedure.

What defenses exist?

Unless provided in statute (as in 18 U.S.C. § 981(a)(2)), innocence of the owner is typically not a defense. Furthermore, courts interpret the statutory defenses stringently. For instance, courts may apply an objective standard to determine if the owner should have had knowledge of the property's illegal use, rather require proof of actual knowledge. The owner may argue that no crime ever occurred, that the government lacked probable cause, or that the property is not closely enough connected to the crime to be considered an instrumentality or proceeds.

Should any of these defenses succeed, the government need simply return the property to the owner. It is not liable to the owner damages caused by the property's detention, including damages resulting during the original seizure or a failure to look after the property while in government custody.

What would happen if H.R. 1658 were passed?

The whole character of civil forfeiture under Federal law would be fundamentally altered. Most importantly, the federal government would have to show by a "clear and convincing evidence" standard that the property in question was eligible for forfeiture. A property owner would be given 30 days to challenge the forfeiture, not 10 days as currently allowed, and would not be required to put up a 10% bond as precondition to the challenge. Judges would have the authority to appoint counsel for indigent plaintiffs, and could release the property to the owner if the owner could show that the loss would be a substantial hardship for him or her. Furthermore, the government would be liable if they negligently lost or damaged the property, and some owners of seized cash could also receive interest if they recover the money.

References and Suggested Readings

Case Law

Statutory Law

Official Sites

Key Internet Sources

Current References and Sites Focusing on Forfeiture Issues

H.R. 1658

Law Journal Articles

  • E. Blumenson & E. Nilsen, E., Policing for Profit: The Drug War's Hidden Economic Agenda, 65 University of Chicago Law Review 35 (1998)
  • D. Boudreaux & A. Pritchard, Innocence Lost: Bennis v. Michigan and the Forfeiture Tradition, 61 Missouri Law Review 593 (1996)
  • A. Nicgorski, Comment, The Continuing Saga of Civil Forfeiture, the "War on Drugs," and the Constitution: Determining the Constitutional Excessiveness, 91 Northwestern University Law Review 374 (1996)