Courts Rule Administrative Forfeitures Do Not Punish Owners Rather, say appellate courts, administrative forfeiture process simply makes property "ownerless"
by Judy Osburn
On August 10, 1995 the Third Circuit Court of Appeals drew a critical distinction between civil and "administrative" forfeiture a procedure by which certain seizures that are not immediately contested (either because the owner wishes to avoid self incrimination or the expense of cost bonds and litigation prevents the owner from gaining access to the courts) are forfeited without trial. The court ruled in U.S. versus Baird 1 that the nature of administrative forfeitures renders the seized property "ownerless," and thus this particular type of forfeiture does not punish the former owner from whom the property was seized. Double Jeopardy does not come into play, states the majority opinion, unless a judicial proceeding takes place. Such proceedings are bypassed under administrative forfeiture rules.2
On the bright side, the Third Circuit agrees with the Ninth Circuit decision in $405K. Quoting the Ninth Circuit, Judge Lewis wrote for the Third Circuit majority: "the 'only fair reading of the Supreme Court's decision in Austin 3 is that it resolves the 'punishment' issue with respect to forfeiture cases for purposes of the Double Jeopardy Clause as well as the excessive fines Clause.'"4 However, the majority ruled that Frank L. Baird was not placed in jeopardy a second time by a criminal indictment that followed the administrative forfeiture of $2,582. Law enforcement officers had seized the cash from Baird's bedroom during a search in which law enforcement officials uncovered an "Ecstasy" manufacturing operation in his residence. Baird's criminal trial had been stayed pending this appeal of the criminal indictment on Double Jeopardy grounds.
Circuit Judge Sarokin pointed out in his dissenting opinion that the Supreme Court explained in U.S. v. Halper 5 "that 'the Double Jeopardy Clause protects against three distinct abuses: a second prosecution for the same offense after acquittal; a second prosecution for the same offense after conviction; and multiple punishments for the same offense.' The instant case involves the third of these protections, a protection which 'has deep roots in our history and jurisprudence.'.The issue should be whether defendant was the owner, not whether he filed a proper and timely claim of ownership in the forfeiture proceeding. He is punished if his property is forfeited, irrespective of whether or not he participated. Hence there should be no distinction between administrative and civil forfeiture; in either instance, a defendant must establish ownership and punishment before he can claim double jeopardy." 6
In his opinion for the Baird majority, Circuit Judge Lewis also lists the above three double jeopardy protections enumerated by the Supreme Court 7, and agrees that multiple punishments for the same offense is indeed the issue of Baird's appeal. However, he then embarks upon a discussion of the nature and process of administrative forfeitures in an attempt to establish that "all property administratively forfeited is, as a matter of law, 'ownerless' property, and the taking of ownerless property 'punishes' no one." 8
Even if Baird is in fact the owner of the forfeited property, argues Judge Lewis, the administrative forfeiture does not place him in jeopardy. The court opinion goes on to examine at what point in a forfeiture proceeding the Double Jeopardy Clause comes into play, or attaches. Lewis concludes that jeopardy does not attach until one is a party to a trial proceeding; and since administrative forfeitures deprive citizens of property without trial "Baird was not and could not have been, placed at risk" of losing the money seized from in his bedroom. 9 Therefore, concludes Judge Lewis, "Frank Baird was not punished as a result of the administrative forfeiture of the money seized at his residence.and assumed for the sake of argument to have been Baird's property."10
Ignoring his own opening paragraph of the court's Double Jeopardy Analysis, which includes "multiple punishments for the same offense" as one of "three distinct abuses protected by the Double Jeopardy Clause of the Fifth Amendment," Judge Lewis chides: "Baird would have us conclude that multiple punishments, per se, violate the Double Jeopardy Clause." A double jeopardy claimant in Baird's position, says Judge Lewis, cannot prevail merely on a showing that he or she has already been punished for the same offense by the same sovereign. "Rather, the double jeopardy claimant must show that the initial punishment was meted out during the course of a prior proceeding" 11 a proceeding that is not available to the claimant once the 20 day time limit for contesting the forfeiture has elapsed.
Judge Sarokin's dissenting opinion points out that the precedent the majority relies on in holding that the Double Jeopardy Clause requires that defendants participate in two judicial proceedings does not even involve a "multiple punishments" claim and so "does not stand for the proposition that multiple judicial proceedings are a precondition to all double jeopardy claims..The issue [in this case] is whether defendant is at risk of being twice punished for the same offense, not whether defendant is at risk of being twice tried."12
According to Judge Sarokin's dissent the government tried to argue "that under Austin only civil forfeitures that are found to be excessive are to be considered punishment." "However," states Sarokin, "the government misstates the holding in Austin. Austin holds that all forfeitures under 881(a)4 and (a)(7) are meant in part to punish and therefore can run afoul of the Excessive Fines Clause." He also notes, as did the Ninth Circuit in 405K, that in reaching its decision regarding Excessive Fines in Austin the Supreme Court relied on its earlier decision in U.S. v. Halper, which specifically involved the double jeopardy issue.
The dissent also reveals the government additionally argued the "application of Halper's 'rational-relation' test whether the amount of the sanction appears to be rationally related to the damages caused by the wrongful conduct of the defendant results in the conclusion that the instant forfeiture of defendant's property does not constitute punishment."However, states Sarokin, "in Austin, the Supreme Court found that the 'rational-relation' test was inapplicable in the forfeiture setting.."13
Additionally, Sarokin points out, this ruling will result in forcing otherwise uncontested forfeitures into court. "'[A] rule which would require property owners to file a claim and go through the motions of contesting a civil forfeiture merely to preserve a double jeopardy issue has little to recommend it. Tens of thousands of uncontested forfeitures would soon find their way into court.'"14
In a decision filed a week earlier the Ninth Circuit also ruled that administrative forfeiture of unclaimed property does not constitute punishment for double jeopardy purposes. Under administrative forfeiture law, writes Circuit Judge Reinhardt for the majority, "if no claim of ownership is asserted, the government is permitted to sell the unclaimed property as if it had been 'abandoned to the United States.'" Therefore, "we conclude that an owner who receives notice of the intended forfeiture and fails to claim an ownership interest in the property has effectively abandoned it."15
The 9th Circuit rejected appellant Joel Cretacci's argument that requiring a defendant to file a claim of ownership during the forfeiture proceeding forces one to sacrifice the right against self-incrimination in order to preserve the right against double jeopardy. In doing so the court declared that a defendant's claim of ownership of property that was subject to forfeiture may not be used for the purpose of proving guilt in a criminal proceeding.16 Thus the Ninth Circuit provided another incentive for adjudicating seizures that would otherwise be forfeited without contest. (However, the court did not address the issue of whether the cost bond in the amount of $2,399 required from Cretacci if he wished to contest the forfeiture may have prevented him from filing a timely claim of ownership.)
Then on August 10, one day before the Baird decision was filed, the Ninth circuit considered whether "administrative steps routinely taken prior to the formal institution of civil forfeiture proceedings, when combined with a criminal indictment arising out of the same facts, offend double jeopardy principles. We hold they do not."17
The Seventh Circuit also held that "the administrative forfeiture of monies did not bar defendant's sentence of imprisonment."18 This 1994 case was relied on by the Third Circuit majority in Baird. Circuit Judge Sarokin wrote in his dissent: "I am unpersuaded by the Torres decision to the extent that it holds that, unless a defendant participates in the forfeiture proceeding, he cannot claim double jeopardy. Additionally, this case is factually distinguishable from Torres..In rejecting Torres's double jeopardy claim, the court stressed that it was not clear who owned the forfeited funds.. "
The above decisions make it clear that all forfeitures should be contested, even if a summary judgment for forfeiture is the only expected outcome of initiating litigation. For now, a defendant relinquishes more than his property if he lets the government get its "freebie" through administrative forfeiture.
1 U.S. v. Baird, US Court of Appeals for the Third Circuit, No. 95-1202, filed August 11, 1995.
2 "Because Baird failed to contest the forfeiture, he never became a party to any judicial proceeding, criminal or civil. In fact, no judicial proceeding occurred prior to the forfeiture of the moneyÄsuch being the very nature of administrative forfeiture." U.S v. Baird at page 11.
3 Austin v. U.S., 113 S. Ct. 2801.
4 U.S. v. Baird at p. 5-6, quoting U.S. v. $405, 089.23, 33 F.3d at 1210, 1219 (9th Cir., 1994).
5 490 US 435, 440 (1989).
6 US v. Baird, at p. 13 quoting U.S. v. Halper (490 US 435, 440 (1989)), an d p.22.
7 US v. Baird, p. 4-5, citing North Carolina v. Pearce, 395 U.S. 711 (1969); Schiro v. Farley, 114 S. Ct. 783 (1994); and US. v. Halper, 490 U.S. 435, 440.
8 US v. Baird, at p. 9.
9 Id. at p. 11.
10 Id. at p. 12.
11 Id. at. p. 11-12.
12 Id. at p. 22.
13 Id. at p. 19.
14 Id. at p. 22, quoting David Smith, Prosecution and Defense of Forfeiture Cases, Mathew & Bender, 12.10, at 12-141 n.33.1.
15 US v. Joel Cretacci, 95 C.D.O.S. 6175, 9th Circuit, filed August 10, 1995.
16 Id. citing Simmons v. U.S.390 U.S. 377, 394 (1968) (holding that a defendant's assertion of ownership in seized property at a pre-trial suppression motion could not later be used against him to prove guilt).
17 U.S. v. Jackson Wong, 95 C.D.O.S. 6325.
18 U.S. v. Baird, at p. 22-23, dissenting opinion, citing U.S. v. Torres, 28 F.3rd 1463 (1994), a case relied on by the Baird majority.