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Supreme Court Rules That Civil Forfeiture is not Punishment for Double Jeopardy Purposes

Criminal Law & Procedure Practice Group Newsletter - Volume 1, Issue 1, Fall 1996
By Larry D. Thompson
December 01, 1996

In United States v. Ursery, 116 S.Ct. 2135 (1996), the United States Supreme Court held by an 8-1 vote that civil forfeitures under 21 U.S.C. §881(a)(6) and (7) and 18 U.S.C. §981(a)(1)(A), like "civil forfeitures generally ... do not constitute `punishment' for purposes of the Double Jeopardy Clause." The decision by Chief Justice Rehnquist reversed the decisions of the Ninth Circuit in United States v. $405,089.23, 33 F.3d 1210 (9th Cir. 1994), involving the forfeiture of proceeds of criminal activity, and the Sixth Circuit in United States v. Ursery, 59 F.3d 568 (6th Cir. 1995), involving the forfeiture of property that facilitated criminal violations.

At issue in the Court's consolidated decision is the federal government's use of its civil forfeiture powers. During the past several years, the United States has exercised its civil forfeiture powers to seize and forfeit property involved in the commission of crime or traceable to the proceeds of crime, while also criminally prosecuting individuals who have violated federal law, such as drug and money laundering statutes.

In $405,089.23, the United States instituted civil forfeiture proceedings against various property seized from or titled to James Wren, Charles Arlt or Payback Mines, a corporation controlled by Arlt, five days after a grand jury returned a superseding indictment against Wren, Arlt and others for conspiracy to aid and abet the manufacture of methamphetamine, conspiracy to launder monetary instruments and money laundering. The civil forfeiture case was stayed by stipulation pending completion of the criminal case. More than a year after the criminal conviction of Wren and Arlt, the district court held that the property was forfeitable to the United States pursuant to 21 U.S.C. §881(a)(6), as proceeds of drug violations and 18 U.S.C. §981(a)(1)(A), as property involved in illegal money laundering transactions. The Ninth Circuit reversed the district court and held that the civil forfeiture of property following a criminal conviction for the same violations constituted a second punishment prohibited by the Double Jeopardy Clause. In reversing the forfeiture judgment and ordering the return of the property, the Ninth Circuit relied upon the Supreme Court's decisions in United States v. Halper, 490 U.S. 435 (1989) and Austin v. United States, 509 U. S. 602 (1993) and reasoned that since the civil forfeiture statutes at issue did not serve solely a remedial purpose, the civil forfeiture constituted a "punishment" for double jeopardy purposes.

In Ursery, the United States instituted a civil forfeiture action against the residence of Guy Jerome Ursery pursuant to 21 U.S.C.§(a)(7), alleging that Ursery's residence facilitated Ursery's violations of federal drug statutes. Police had discovered marijuana seeds, stems, stalks and a growlight inside Ursery's residence as well as plots of marijuana growing near Ursery's property line. Ursery and his wife filed claims in the civil forfeiture case, and later agreed to pay the United States the sum of $13,250.00 in full settlement of the forfeiture action. Prior to the entry of the consent judgment in the civil forfeiture case, Ursery was indicted and charged with one count of manufacture of marijuana in violation of 21 U.S.C. §841(a)(1). Approximately five weeks after the entry of the civil forfeiture judgment, the jury returned a guilty verdict against Ursery in the criminal action. The Sixth Circuit reversed Ursery's criminal conviction holding that the criminal conviction following a prior, civil forfeiture violates the Double Jeopardy Clause. In Ursery, the Sixth Circuit reasoned that under Halper and Austin, as a categorical matter, any civil forfeiture under 21 U.S.C. §881(a)(7) constitutes punishment for double jeopardy purposes.

The Supreme Court consolidated the Ninth Circuit and Sixth Circuit cases for review and reversed both decisions holding that those civil forfeitures, as well as civil forfeitures generally, do not constitute punishment for double jeopardy purposes. Writing for the majority, Justice Rehnquist began by emphasizing that "since the earliest years of this Nation, Congress has authorized the Government to seek parallel in rem civil forfeiture actions and criminal actions based upon the same underlying events." Justice Rehnquist noted that in the line of cases decided by the Court considering the application of the Double Jeopardy Clause to civil forfeitures, Various Items of Personal Property v. United States, 282 U.S. 577 (1931), One Lot Emerald Cut Stones v. United States, 409 U.S. 232 (1972), and United States v. One Assortment of 89 Firearms, 465 U.S. 354 (1984), the Court concluded that civil forfeitures do not impose punishment for Double Jeopardy purposes.

Justice Rehnquist reasoned that the Court's seminal decision in 89 Firearms, 465 U.S. 354 (1984) (holding that the forfeiture of firearms was not barred by the prior, criminal proceeding), established a two staged inquiry: first, whether Congress intended forfeiture as a remedial sanction and second, whether the claimant established by the clearest proof, that the forfeiture law at issue was so punitive, either in purpose or effect, as to negate Congress' intention to establish a civil remedial sanction. In applying this two-part test, Justice Rehnquist first concluded that Congress intended in rem forfeiture proceedings to be a civil, not a criminal, sanction. Justice Rehnquist next determined that there is little evidence, much less clear proof, that forfeiture proceedings are "so punitive in form and effect as to render them criminal despite Congress' intent to the contrary."

Justice Rehnquist explained that the Court's decisions in Halper, Austin and Department of Revenue v. Kurth Ranch, 114 S. Ct. 1937 (1944), did nothing to replace the Court's traditional understanding that civil forfeiture does not constitute punishment for double jeopardy purposes. Justice Rehnquist argued that Halper announced a rule that was limited to the rare civil penalty case "where a fixed penalty provision subjects a prolific but small-gauge offender to a sanction overwhelmingly disproportionate to the damage he had caused." Justice Rehnquist distinguished a fixed penalty provision, which compensates the government for harm it has suffered, from an in rem forfeiture statute, which serves a variety of purposes, including the confiscation of property used in violation of the law and the disgorgement of the fruits of illegal conduct. Justice Rehnquist reasoned that the case-by-case approach announced in Halper, in which a court must balance the harm suffered by the government against the size of the penalty imposed, is not applicable to civil forfeiture since "it is virtually impossible to quantify, even approximately, the nonpunitive purposes served by the particular civil forfeiture."

Justice Rehnquist also argued that Austin was decided solely under the Excessive Fines Clause of the Eighth Amendment, a constitutional provision which "we never have understood as parallel to, or even related to, the Double Jeopardy Clause of the Fifth Amendment." Justice Rehnquist explained that the categorical approach outlined in Austin was appropriate for the Excessive Fines Clause issues since a preliminary-stage inquiry that determined the disportionality of a particular sanction, would duplicate the excessiveness analysis. Justice Rehnquist noted that while forfeitures are subject to review under the Excessive Fines Clause, "this does not mean, however, that these forfeitures are so punitive as to constitute punishment under the Double Jeopardy Clause." Justice Rehnquist noted that Kurth Ranch dealt with a tax proceeding under the Double Jeopardy Clause and not with a civil forfeiture proceeding.

In his concurring opinion, Justice Kennedy reasoned that civil in rem forfeiture is not punishment of the wrongdoer for the criminal offense. Justice Kennedy noted that the rule that the Double Jeopardy Clause applies only to in personam punishments of the wrongdoer and not to in rem forfeitures, does not imply that forfeitures inflict no punishment. Justice Kennedy argued that since "the punishment befalls any property holder who cannot claim statutory innocence, whether or not he committed any criminal acts, it is not a punishment for a person's criminal wrongdoing." In a separate concurring opinion, Justice Scalia, joined by Justice Thomas, noted that the Double Jeopardy Clause prohibits successive prosection, not successive punishment, and that civil forfeiture proceedings are not criminal prosecutions.

Justice Stevens concurred in the decision of the Court regarding the $405,089.23 as proceeds of criminal activity and noted that the forfeiture of proceeds "like the confiscation of money stolen from a bank, does not punish respondents because it exacts no price in liberty or lawfully derived property from them." Justice Stevens, however, dissented in the judgment of the Court regarding Ursery's criminal conviction. Justice Stevens argued that Ursery had been punished in the forfeiture proceeding and could not be subsequently tried criminally. Justice Stevens noted that in Halper, the Court stated that the labels of criminal and civil are not determinative of whether a proceeding punishes an individual. Justice Stevens argued that common sense would dictate that there "is simply no rational basis for characterizing the seizure of this respondent's home as anything other than punishment for his crime." Justice Stevens criticized the Court's endorsement of the view recently announced in Bennis v. Michigan, 116 S.Ct. 994 (1996) that the purpose of deterrence as served by civil, in rem forfeiture is a legitimate, remedial purpose.

In light of the Supreme Court's decision, the government will now be able to exercise its civil forfeiture powers without risking any related criminal prosecution. Although federal law authorizes the forfeiture of property in both civil and criminal contexts, in many instances criminal forfeiture is not an effective tool. Unlike civil forfeiture proceedings, criminal forfeiture may only be instituted as part of the indictment and ordered as part of sentencing upon conviction. On the other hand, civil forfeitures are in rem actions against the property itself and may occur prior to the return of an indictment or even in the absence of a criminal prosecution.

From the tone of the Ursery opinion, it is unlikely that the Supreme Court will be sympathetic to arguments restricting civil forfeiture. Some who are concerned over the government's increasing power in the civil forfeiture area have attempted legislative reform. A little over a year ago, representative Henry Hyde (R.-Ill.) introduced the Civil Asset Forfeiture Reform Act, H.R. 1916. At that time, representative Hyde characterized the civil asset forfeiture system as a "jurisprudential Frankenstein monster." 2 Money Laundering Law Report (August 1996). Whether civil asset forfeiture has long been a powerful tool in law enforcement and this Supreme Court is not about to disturb years of legal precedent upholding civil forfeiture. In Bennis v. Michigan, 166 S.Ct. 994, 1003 (1996), Justice Thomas, in his concurring opinion, recognized the potential for abuse in civil forfeiture but nevertheless aptly noted that any reform of the civil forfeiture system should not come from the Court but instead the state legislatures, Congress or executive branch of the federal government:

Improperly used, forfeiture could become more like a roulette wheel employed to raise revenue from innocent but hapless owners whose property is unforeseeably misused, or a tool wielded to punish those who associate with criminals, than a component of a system of justice. When the property sought to be forfeited has been entrusted by its owner to one who uses it for crime, however, the Constitution apparently assigns to the States and to the political branches of the Federal Government the primary responsibility for avoiding that result.

As a result of the Supreme Court's decision, the government will continue to exercise its rights under the Civil Forfeiture laws of the United States.

* Larry Thompson is the former United States Attorney for the Northern District of Georgia, and is currently a partner in the law firm of King & Spalding.