Can The Kaleys Be Beggared Into Submission?

  1. Indict
  2. Seize assets
  3. Compel impoverished defendants to defend
  4. ?????
  5. PROFIT!!!

Or, to tailor a meme more appropriately to the subject, convict.  Having spent some energy trying to explain how asset forfeiture was ignored by pretty much everybody when it was just the drug dealers who suffered, oral argument before the United States Supreme Court in Kaley v. United States revealed the irony when the tactics that were so beloved in Monsanto were applied to white collar defendants.

Soon after the issues raised in Kaley were discussed here, I heard from Kerri Kaley, who asked me to anonymize her name so the accusations wouldn’t taint her in perpetuity on the internet. I was happy to do so. She had been convicted of no crime.  She still hasn’t, though her case was argued before the Supreme Court yesterday.

The underlying facts and argument are compiled at SCOTUSBlog, which begins with a particularly troubling parenthetical:

The issue before the Court arises from the (seemingly increasingly) common practice of the government freezing the assets of an indicted criminal defendant, who needs the assets to hire a lawyer.

While I’ve no doubt that it is “seemingly increasingly” common practice to the nice folks at SCOTUSBlog, and likely the nice folks who diligently read it, this parenthetical infuriates me.  No doubt it seems to be increasingly common, but it’s not for lack of common use before. It’s because you didn’t care until it started being used for non-drug dealer defendants.  Suddenly, it appeared on your radar. Suddenly, it was Kafkaesque. How? How did it come to this? That’s what happens when you closely watch the law with blinders on.  /rant

At the New York Times, Adam Liptak offers a glimpse of the justices at argument:

The Kaleys were accused of participating in a scheme to obtain and sell prescription medical devices. They said they were likely to win at trial because no one had been harmed by their conduct, a point two justices seemed to find plausible.

The couple’s lawyer, Howard Srebnick, said the case posed a fundamental issue.

“I ask that this court not rule that the government can beggar a defendant into submission,” Mr. Srebnick said. “I ask this court not to rule that the government can impoverish someone without giving them a chance to be heard through their counsel of choice.”

How can this be? Oh, so naïve.  The mantra way back when was to “take the profit out of crime.” Who wouldn’t want that? There was no advocacy group for crack dealers in the wee days of the war on drugs, arguing that even dope dealers were entitled to constitutional rights, like the right to counsel of choice.

Instead, there was law that held that the money was forfeit upon commission of the conduct. Note the language, upon commission, not conviction. So there’s no crime until a jury finds it to be so? Ah, that only applies to people. This is about money, and money doesn’t have constitutional rights, even though it can still be named as a defendant in matters like United States against $124,700 in United States Currency.

The government was empowered to seize the money based upon probable cause, and when the grand jury indicted the Kaleys, there it was.  They sought to challenge the probable cause finding by the grand jury, as the Kaleys maintain that they are innocent of any crime and the government’s case is total crap.  But in federal court, there is no mechanism to challenge the grand jury’s finding. That’s what trial is for.

The argument proffered to the Supremes was that a means to challenge the grand jury’s probable cause finding is needed, they should be allowed to do so before trial at the district court.  The government, shockingly, completely disagrees.

Justice Scalia, recognizing the bind here, struggled to find a solution:

All the Kaleys were seeking was a hearing at which they could try to show that they were entitled to use their money to defend themselves because the charges against them were flawed.

Justice Antonin Scalia said he was uncomfortable with the modest step of allowing a hearing but might be open to a bolder one.

“To save your client, I would prefer a rule that says you cannot, even with a grand jury indictment, prevent the defendant from using funds that are in his possession to hire counsel,” he said. “Don’t need a hearing.”

Later in the argument, he proposed another solution. “I don’t like casting into doubt the judgment of the grand jury,” he said, “but why couldn’t we say that when you’re taking away funds that are needed for hiring a lawyer for your defense, you need something more than probable cause?” he asked. “Couldn’t we make that up?”

Well sure, they can make it up, just like they made up the legal fiction that the money offends the sovereign.  But then, making stuff up is how the Supremes got themselves (and the Kaleys) into this jam in the first place.  Empathetic Harvardtina, Elena Kagan, questioned why this was worth her time:

Some justices tried to assess the practical consequences of allowing the requested hearings. Justice Elena Kagan said that defendants had never prevailed in any of 25 such hearings conducted in a part of the country that allowed them.

“So what are we going through all this rigamarole for,” she asked, “for the prospect of, you know, coming out the same way in the end?”

Snark aside, Justice Kagan’s point is important. In those jurisdictions where the indictment is subject to pre-trial scrutiny, every trial that results in acquittal survived it. The tendency is strong to “respect” the grand jury’s indictment of Judge Watchler’s “ham sandwich” and leave it up to the trial jury to do the dirty work.

The government’s argument in opposition raised a curious point, that the same grand jury determination of probable cause was used as justification to detain a human being.  Was money deserving of greater protection than liberty?

Chief Justice Roberts rejected the comparison. “It’s not that property is more valuable than liberty or anything like that,” he said. “It’s that the property can be used to hire a lawyer who can keep him out of jail for the next 30 years. So the parallels don’t strike me as useful.”

The nuts and bolts of an accused being capable of defending against the government’s accusation raises hairy issues, not the least of which is the catch-22 created by this system which the justices appear to have largely appreciated.  Too bad nobody gave a damn back when Monsanto was decided and it was only drug dealers at risk.


10 thoughts on “Can The Kaleys Be Beggared Into Submission?

  1. REvers

    So they end up being able to spend the money for lawyers, and then lose the trial. I can guess what happens next: the government looks to the lawyers to give the money back. Isn’t that how they did things in the eighties?

  2. jill mcmahon

    Take the profit out of crime– and put it into SWAT teams. An upstate police department recently obtained a MRAP to help take down the bad guys.

      1. jill mcmahon

        Sorry. Tie-in to me is that our local MRAP acquisition is emblematic of how proceeds from forfeitures have become a cash cow for law enforcement. To the extent that, having made reasonable acquisitions for tactical squads, they are now making irrational acquisitions simply because they have the money to do so. The Institute for Justice’s amicus brief discusses law enforcement’s profit motive with respect to forfeiture, as this as has this blog.

        That aside, if there must be a hearing to evaluate Justice’s request for pre-trial detention how can there not be a hearing for forfeiture? Ability to pay for a good lawyer affects the defendant’s freedom in the long-term, not just before trial.

        1. SHG Post author

          I saw where you took the lateral and ran with it. It’s not that you were wrong, but that it just wasn’t the subject of the post. At all.

  3. Ultraviolet admin

    Hmm sounds like the court is at least a bit disturbed by the case and the implications. I hope that’s a good sign. On criminal defense the court’s alliances can oddly shift, especially Scalia.

    I also take heart in what my ethics professor said, defending drug dealers was the least stressful job he had from a client relation stand point because they understood what you did and respected you enough to pay up.

    1. SHG Post author

      Your ethics prof knows what he’s talking about. Good honest drug dealers make great clients, and see getting arrested and defending to be the cost of doing business.

      As for the oral argument, it does sound promising, but I wouldn’t get my hopes up. We’ve been disappointed here before.

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