Civil forfeiture: a diminishing power.

One of the most dramatic changes in U.S. law in the last 15 years has been the tremendous growth in the government's use of forfeitures and asset seizures,

In 1978, Congress amended the Comprehensive Drug Abuse Prevention and Control Act of 1970 to authorize the seizure and forfeiture of proceeds of illegal drug transactions. (21 U.S.C. [section]881 (1988).) Before that, the law only authorized the forfeiture of the illegal substances themselves and the instruments by which they were manufactured and distributed.

In 1984, the Racketeer Influenced and Corrupt Organizations Act was amended to specifically authorize seizure of proceeds of illegal racketeering activities. (18 U.S.C. [section]1963 (1988).) The Comprehensive Crime Control Act of 1984 further expanded the government's forfeiture power by giving the government title to the proceeds of illegal drug actions upon the commission of an act giving rise to forfeiture. (21 U.S.C. [section]881(a)(6) (1988).)

Since then, forfeiture provisions have been written into more than 100 federal laws covering a range of subjects from fraud and gambling to importing tainted meats and transporting intoxicants onto Indian lands. (See Richard Miniter, Property Seizures on Trial, 9 Insight 10 (Feb. 22, 1993).)

Laws authorizing forfeiture have existed throughout U.S. history. For example, the first Congress enacted legislation authorizing the seizure of ships and cargoes involved in customs offenses and engaged in piracy. (See United States v. A Parcel of Land, Buildings, Appurtenances and Improvements, Known as 92 Buena Vista Avenue, Rumson, New Jersey, et al., 113 S. Ct. 1126, 1132 & n.11, 12 (1993) (plurality opinion).) The earlier statutes, however, involved seizure of property where the property itself was being used illegally.

The substantial change in the law in recent years has expanded forfeiture to the assets and proceeds of illegal transactions. Since 1985, more than $2.6 billion in houses, cash, cars, and other assets have been seized. (See Miniter, supra, at 11.) The U.S. Justice Department's Asset Forfeiture Fund increased from $27 million in fiscal year 1985 to $531 million in fiscal year 1992. (Peter Cassidy, Without Due Process, The Progressive, Aug. 1993, at 32.)

In recent years, great concern has been expressed about the government's forfeiture power The laws provide little procedural protection for those whose assets are seized. The statutes do not give people the right to contest forfeitures before a judge. A person who wants to sue for recovery of seized property must post a bond equal to 10 percent of its value within 30 days after it is seized. The property is permanently forfeited to the government if no bond is posted.

Forfeiture actions are based on criminal acts, but they are very different from criminal proceedings. Although criminal trials must occur relatively quickly after an arrest because of speedy-trial laws, forfeiture actions may not come to trial for years after a seizure.

Most important, in a criminal that the government must prove its case beyond a reasonable doubt, but in a forfeiture action the government need only meet a preponderance of the evidence standard. In other words, in forfeiture actions the government essentially is accusing an individual of committing criminal acts, such as engaging in illegal drug transactions, but is filing a civil action that only need meet a civil standard of proof. A 1991 study found that 80 percent of people whose property is seized by the government are never charged, with a crime. (See Miniter, supra, at 11.)

The laws do not limit the amount of property subject to forfeiture or require that it be in proportion to the offense. A small amount of drugs can be the basis for a huge forfeiture. For example, a man in California was charged with cultivating marijuana. There was no evidence that he was involved in selling marijuana. Nonetheless, the government seized $25,000 in cash from his house, liquidated and sold stocks and bonds worth $177,000, and seized the house where the marijuana was found. (Dan McGrath, Greedy Bureaucrats Threaten to Ruin a Life, SACRAMENTO BEE, Oct. 1, 1993, at A2.)

Justice Times Three

In the last year, the Supreme Court has decided three cases limiting the government's forfeiture power. One case interprets forfeiture law to protect innocent owners of property In the other two cases, the Court held that a person is entitled to due process before property can be seized and that forfeitures are limited by the Excessive Fines Clause of the Eighth Amendment.

The forfeiture law includes a provision protecting innocent owners of property used in drug transactions. It specifically provides that "no property shall be forfeited . . ., to the extent of the interest of the owner, by reason of any act or omission established by that owner to have been committed or omitted without the knowledge or consent of that owner." (21 U.S.C. [section]881(a)(6) (1988).)

In A Parcel of Land, the Court held that a person does not have to be a bona fide purchaser to qualify as an innocent owner. In that case, a woman received a cash gift from her boyfriend and used the money to buy a house. The government contended that the money was the proceeds of an illegal drug transaction and seized the property.

Specifically, the government argued that the finds legally belonged to the government because they were acquired in a drug transaction and that therefore everything bought with them also belonged to the government. But the Court ruled that if a person acquires property without knowledge of its illegal derivation, the innocent-owner provision of the forfeiture law provides protection from forfeiture. (A Parcel of Land, 113 S. Ct. 1126,1137.)

This Term, in United States v. James Daniel Good Real Property, the Court held that absent exigent circumstances, due process requires that before seizing property the government must provide the owner with notice and a meaningful opportunity to be heard. H4 S. Ct. 492 (1993).)

In 1985, fames Daniel Good pleaded guilty to violating Hawaii's drug law and was sentenced to one year in jail and five years' probation. He was also fined $1,000 and had to forfeit $3,187 in cash found on the premises. In 1989, four and a half years after his guilty plea, the federal government filed a forfeiture action to seize his house and the four acres of land on which it was situated. The government claimed the property had been used in the commission of a federal drug offense. The property was seized without Good being given any advance notice or hearing.

Good filed suit, arguing that he had been denied due process. The government argued that it was not required to provide notice or a hearing before a forfeiture. The government claimed that under the Fourth Amendment, it only needed to appear at an ex parte hearing before a judge and that seizure of real property under the drug forfeiture laws is excepted from the usual due process requirements.

The Court rejected both of these contentions. It explained that an ex parte proceeding is insufficient to meet the requirements of due process. Justice Anthony Kennedy, writing for the majority, declared that "the right to prior notice and a hearing is central to the Constitution's command of due process." (Id. at 500.)

The Court then applied the three-part balancing test for due process cases stated in Matthews v. Eldridge. (424 U.S. 319 (1976).) The Court concluded that (1) a real property owner has a great interest in continued possession of the property, (2) requiring notice and a hearing before seizure of the property would provide substantial protection of this interest, and (3) the government's interests would not be impeded by this procedure. Only if there are exigent circumstances, like a reason to believe that the owner is likely to destroy the property if notified of a pending forfeiture proceeding, may the government rely on an ex parte proceeding to meet the due process requirements.

James Daniel Good Real Property provides substantial procedural protection before the government can seize a person's assets. The Court properly held that because seizure deprives a person of property there must be due process--notice and an opportunity to be heard--before forfeiture can occur.

The third case, Austin v. United States, held that because forfeiture actions are monetary punishments, they are subject to the limitations of the Excessive Fines Clause of the Eighth Amendment. (113 S. Ct. 2801 (1993).) In that case, the government alleged that Lyle Austin brought a small amount (two ounces) of cocaine from his mobile home to his automobile body shop, where he sold it. Austin pleaded guilty to one count of possessing cocaine with intent to distribute and was sentenced by a state court to seven years in prison. The U.S. government then seized his mobile home and his body shop on the grounds that they had been used in violating drug laws.

Austin argued that the large forfeiture violated the Eighth Amendment provision that forbids excessive fines. The Supreme Court, in an opinion by justice Harry Blackmun, exhaustively reviewed the history of forfeitures and concluded that they are punishments and that they are limited by the Excessive Fines Clause of the Eighth Amendment. The Court said, "We therefore conclude that forfeiture under these provisions constitutes |payment to a sovereign as punishment for some offense,' and, as such, is subject to the limitations of the Excessive Fines Clause." Id. at 2812 (citation omitted).)

The Court, however, refused to articulate criteria for lower courts to use in deciding what is an excessive fine. The Court said that the lower appellate court in Austin had not decided that question because it had deemed the Eighth Amendment inapplicable and that "[p]rudence dictates that we allow the lower courts to consider that question in the first instance." (Id.) Thus, Austin is an open invitation for those subjected to large forfeitures to claim that the Eighth Amendment has been violated. The lower courts will have to struggle to determine what is too much when it comes to seizures and forfeitures.

These three very recent decisions are undoubtedly just the beginning of Supreme Court decisions dealing with forfeitures. It is notable that the current Court, which generally has been very deferential to the government in drug cases, has recorded from the government's expansive use of forfeitures that offer little in the way of procedural protection to property owners.

Future Reform

Other limits on the government's forfeiture power might come from Congress. Many senators and representatives, liberal and conservative, have expressed shock at stories of government abuses.

For example, conservative Representative Henry Hyde R-111.) recently introduced legislation entitled "A Bill to Reform Certain Statutes Regarding Civil Asset Forfeiture." (H.R. 2417, 103d Congress, 1st Sess. (1993).) Likewise, liberal Congressman John Conyers (D-Mich.) also recently introduced a bill to reform laws concerning forfeitures. (H.R. 3347, 103d Congress, 1st Sess. (1993).)

These bills, and several others that are currently pending in Congress, would increase the burden of proof on the government in forfeiture cases, require that counsel be provided to those whose assets have been seized, and make it easier for people to regain their property, especially where the seizure imposes a substantial hardship.

The government's use of forfeitures raises fundamental constitutional questions. As the Supreme Court's recent decisions have recognized, seizing a person's property without due process and in an amount that is totally out of proportion to the crime alleged is simply unconstitutional.

Erwin Chemerinsky is the Legion Lex Professor of Law at the University of Southern California Law Center in Los Angeles. He wishes to thank Sandra Lepson, a third-year law student at the law center, for her research assistance with this article.